After the United States (U.S.) implemented a quadrupling of tariffs on Chinese electric vehicles (EVs), Canada is now also evaluating the possibility of imposing higher tariffs on Chinese EVs as well. 

Prime Minister Justin Trudeau, Industry Minister François-Philippe Champagne, and Trade Minister Mary Ng have all indicated that while no definitive measures have been initiated, the situation to impose higher tariffs on Chinese EVs is under close scrutiny. 

Currently, Chinese EVs hold a minor share in Canada’s EV market over the past year having surged in terms of imports worth $84 million back in 2022 and went up to $2.2 billion in 2023. Notably, Canada imposes a 6% tariff on Chinese-made vehicles, but the vehicles are eligible for up to $5,000 in federal rebates for EV purchases according to The Canadian Press. 

Recently, the U.S. 25% to 100% increase in tariffs on Chinese EVs is scheduled for August 1, and this action reflects the Biden administration’s motive to protect the U.S. EV market. Furthermore, the European Commission is currently investigating allegations of anti-competitive subsidies benefiting Chinese automakers. If Canada were to follow along, Chinese EVs would face additional concerns to further its expansion in global EV markets. 

In regards to Canada’s plans for expanding EVs in its automotive market, the Canadian government has mandated one-fifth of all sales must be EVs by 2026, three-fifths by 2030, and 100% by 2035 according to The Canadian Press. With higher tariffs on Chinese EVs to be imposed, this goal will face hurdles while the country is on this path. 

As Canada continues to evaluate its stance on implementing tariffs on Chinese EVs, the implementation of quadrupling tariffs on them by its American neighbor with influences from the European Commission’s recent investigation may possibly lean them towards similar actions. With the EV market growing and evolving, the rate of EV adoption will certainly be swayed depending on Canada’s decision. 

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