On August 26, 2024, Canada announced that it will be implementing a 100% surtax on all imports of "Chinese-made EVs" and a 25% surtax on imports of certain steel and aluminum products from China. Canada has explained that its rationale for these measures is "to level the playing field for Canadian workers and allow Canada's EV industry and steel and aluminum producers to compete in domestic, North American, and global markets".
As of October 1, 2024, electric vehicle ("EV") imports from China will be subject to a 100% import surtax, in addition to the current 6.1% most-favoured-nation duty rate. The surtax will apply to all types of EVs Chinese-made EVs, including hybrid and electric busses, trucks, vans, and passenger vehicles. Canada also plans to limit access to certain government incentive programs relating to zero emission vehicles "to products made in countries which have negotiated free trade agreements with Canada".
Canada will also impose a 25% surtax on steel and aluminum products from China, which will come into effect on October 15, 2024. An initial list of goods has been released, and The final list of goods that will be subject to the 25% surtax will be made public on October 1, 2024. Goods in transit to Canada on the day on which the surtaxes come into force will not be subject to the surtax.
The announcement comes following a According to the news release, "consultations with stakeholders have confirmed that exceptional measures are required to address this extraordinary threat".
A second 30-day consultation period was announced regarding "other sectors critical to Canada's future prosperity, including batteries and battery parts, semiconductors, solar products, and critical minerals".
Earlier this year, both the United States and the European Union have imposed import duties on Chinese EVs and EV inputs. Canada's 100% surtax is similar to the 25-100% Section 301 tariffs imposed by the United States, but markedly higher than the revised 17.0-36.3% definitive countervailing duties expected to be imposed by the European Union.
The import measures are expected to be enacted pursuant to section 53(2) of the Customs Tariff, which permits the Governor in Council to take "special measures" in relation to practices of foreign countries "that adversely affect... trade in goods or services of Canada". Critics have noted that imposing duties unilaterally in this manner may not be considered WTO compliant, which may open Canada to a risk of trade retaliation from China.
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