Canadian Finance Minister Chrystia Freeland will convene with business and labor groups next week to discuss potential trade barriers against Chinese-made vehicles. This move stems from the government’s recent public consultation on responding to what it deems as “unfair Chinese trade practices” in the electric vehicle sector. Canada is closely observing the US and EU’s actions in imposing tariffs on Chinese goods, signaling a broader trend of reassessing trade relations with China.
Freeland underscored the need for secure supply chains and a shift in approach towards Chinese overcapacity. She articulated the evolving global landscape, stating that “geopolitics and geoeconomics is back. That means that Western countries— and very much the US — is putting a premium on secure supply chains and is taking a different attitude towards Chinese overcapacity.” She emphasized the critical role Canada plays for the United States in this context.
The Canadian auto industry, a vital sector supporting over 125,000 jobs and boasting a world-leading electric vehicle (EV) supply chain potential, faces challenges. The industry contends with what it considers unfair competition stemming from China’s deliberate overproduction and perceived lack of robust labor and environmental standards. This has led to a global oversupply of electric vehicles, potentially jeopardizing the profitability of EV producers, including those in Canada.
In response, the government has launched a 30-day consultation period from July 2 to August 1, 2024, to explore policy measures aimed at shielding Canadian auto workers and the EV industry from China’s alleged unfair trade practices. The objective is to prevent trade diversion following recent actions by Canada’s trading partners.
The government faces internal pressures to safeguard local jobs and wages within the auto industry while simultaneously extending subsidies to entice global automakers to establish electric-vehicle battery production facilities in Ontario.
Freeland has criticized China’s economic policies, suggesting a prevalent view that China’s entry into the WTO was a mistake. She has stressed the necessity for Western countries to adopt a “clear-eyed” perspective regarding China’s intentions.
