In a move that highlights the growing tensions between Canada and China over trade and electric vehicle policies, Tesla Inc. (TSLA) reportedly sought a tariff reduction from the Canadian government before the country imposed a 100% tariff on all Chinese-made electric vehicles (EVs) this week.
The Canadian government announced on Monday that it would levy a 100% tariff on all EVs manufactured in China and sold in the country, effective October 1. These tariffs also apply to EVs made by Tesla. According to Reuters, citing a government source familiar with the matter, Tesla approached Canada before the announcement and requested a tariff rate similar to what it receives in the European Union. However, the company has not contacted Ottawa since the announcement.
The European Union, earlier this month, announced a 9% tariff on EVs made by Tesla in China, while other Chinese EV makers face tariffs as high as 36.3%. The office of Canada’s Finance Minister declined to address talks with Tesla, Reuters said.
Canada’s new tariff proposal follows the U.S. government’s May announcement that it would quadruple tariffs on Chinese EV imports to 100%. However, Tesla doesn’t import China-made EVs to the U.S., and the tariffs are yet to be implemented.
The Chinese Embassy in Canada strongly objected to the new tariff decision, labeling it as trade protectionism and political dominance. It warned that the tariffs would negatively impact economic cooperation between the two nations and hinder Canada’s green transformation efforts.
Canadian Prime Minister Justin Trudeau said earlier this week that the tariffs are aimed at countering China’s intentional, state-directed policy of overcapacity. However, the Chinese Embassy in Canada rejected Canada’s claims of overcapacity in China’s electric vehicle industry, describing them as “groundless.”
