TMTPost -- China expressed its “strong dissatisfaction and resolute opposition” over Canadian government’s decision to follow suit after its Western allies to levy hefty tariffs on electric vehicle (EV) imports, a spoksperson of the Chinese embassy in Canada said Monday in a statement.

Credit：Xinhua News Agency

Canada’s move is typical trade protectionism and politically-motivated decision, which violates the World Trade Organization (WTO) rules and goes against Canada’s traditional image as a global champion for free trade and climate change mitigation the spokesperson slapped. “It will damage trade and economic cooperation between China and Canada, hurt the interests of Canadian consumers and enterprises, slow down the green transition process of Canada and certainly won’t help global efforts to address climate change, which benefits no one and will only backfire,” the spokesperson said.

The spokesperson described Canadian’s accusation of China’s overcapacity “groundless”, stressing the rapid development of China’s EV  industry is a result of persistent technological innovation, well-established industrial and supply chains, and full market competition. The spokesperson attributed competitiveness of the industry to leverage of its comparative advantages and following market principles, rather than relying on government subsidies. The development China’s EV industry has made positive contributions to the world’s efforts to address climate change and realize green energy transformation, the spokesperson observed.

China urges the Canadian side to respect facts, abide by the WTO rules, immediately correct its wrong practices, and stop politicizing economic and trade issues, according to the spokesperson. The person cautioned Beijing will “take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.”

Earlier Monday, Canada announced it would impose a 100% additional tariff on EV imports from China effective October 1, on top of the current tariff of 6.1% applied to EVs made in China. The government also intended to implement a 25% additional tariff on steel and aluminium imports from China, effective October 15.

Canadian auto workers and the auto sector currently face unfair competition from Chinese producers, who benefit from unfair, non-market policies and practices, the Department of Finance of Canada said in its press. China’s intentional, state-directed policy of overcapacity and lack of rigorous labour and environmental standards threaten workers and businesses in the EV industry around the world and undermine Canada’s long term economic prosperity, according to the department.

Canada suggested it may take further steps to curb more China’s industries like semiconductor. The government will continue to work with the United States and other allies to ensure that customers around the world are not unfairly penalized by non-market practices of countries such as China, Prime Minister Justin Trudeau said. Ottawa is looking at further punitive measures such as tariffs on chips and solar cells, Trudeau said, without giving details. 

The latest tariffs were on heels of new tariffs on Chinese-made EVs taken by the U.S. and European Union.

The White House announced in May that U.S. President Joe Biden directed his Trade Representative to raise tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China. The direction leads to sharp increases in tariffs across strategic sectors such as semiconductors and impose new tariffs on cranes and medical products. The tariff rate on EVs under Section 301 will increase to 100%, quadrupling the current tariff of 25%.

The European Commission announced on July 4 it imposed provisional countervailing duties of up to 37.6%, on top of the ordinary BEV import duty of 10%, on imports of battery electric vehicles (BEVs) from China. The commission concluded through an anti-subsidy investigation that the BEV value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.

The European Commission unveiled last week its draft decision to impose definitive countervailing duties on imports of BEVs from China to interested parties.The Commission said it would make a slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures, though it still believes Chinese EV production has been benefited from subsidies. The regulatory body proposed to add up to 36.7% to the current 10% duty faced by Chinese exporters, modestly lowered from the initial maximum planned duty of 37.6% set in the start of July.