The Government of Canada has announced the implementation of a number of measures to protect Canadian workers and key sectors of the economy, such as the automotive industry, steel and aluminum, in the face of the growing threat of unfair trade practices from China.The Government of Canada has announced the implementation of several measures to protect Canadian workers and key sectors of the economy, such as the automotive, steel and aluminum industries, in the face of the growing threat of unfair trade practices from China.
Canada’s new tax, along with the other actions announced by Deputy Prime Minister and Finance Minister Chrystia Freeland, aim to level the playing field and ensure that Canadian companies can compete fairly in the global marketplace.
100% tax on Chinese electric vehicles
As of October 1, 2024, all electric vehicles will electric vehicles (EVs) manufactured in China will be subject to a 100% tariff, which will be in addition to the existing 6.1% tariff. This measure covers cars, trucks, buses and delivery vans, including some hybrid models.
The objective is to protect the Canadian automotive industry from unfair competition arising from Chinese overcapacity policies and state subsidies, which have allowed China to dominate the global electric vehicle market.
In addition, the Government of Canada has decided to impose a 25% surcharge on imports of steel and aluminum products from China, effective October 15, 2024. This action is in response to concerns about market-distorting Chinese trade practices that threaten the sustainability of jobs in the Canadian manufacturing sector.
China’s reaction to Canada’s tax
China’s response was not long in coming. The Chinese Embassy in Canada expressed its strong dissatisfaction and opposition to the Canadian government’s decision, calling it typical and politically motivated trade protectionism.calling it typical and politically motivated trade protectionism. According to an embassy spokesperson, this action violates World Trade Organization (WTO) rules and damages Canada’s image as an advocate of free trade and the fight against climate change.
The spokesperson also warned that these measures will harm trade and economic cooperation between the two countries, will affect Canadian consumers and businesses, and could slow down the Canada’s Canada’s green transition. In addition, it was stressed that the development of China’s electric vehicle industry is the result of technological innovation and market competition, not state subsidies. China, the spokesman said, will take all necessary measures to protect the legitimate rights and interests of its enterprises.
Limitations on incentives for zero-emission vehicles
To further strengthen the Canadian economy, a 30-day consultation will be launched to assess the possible implementation of similar measures in other crucial sectors such as batteries, semiconductors, solar products and essential minerals. This consultation seeks to ensure that the transition to a green economy economy is not compromised by unfair trade practices.
The government has also announced its intention to restrict eligibility for incentives for zero-emission zero-emission vehicle incentives to products manufactured in countries that have free trade agreements with Canada. This measure is intended to protect local workers and industry while moving towards emission reduction targets.
These measures underscore Canada’s commitment to protecting its economy and ensuring a competitive and sustainable future for its key industries. These actions are expected to be reviewed within a year and, if necessary, supplemented with new measures.
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Source: Canada.CA
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