Canada to implement 25% surtax on Chinese steel, aluminum; 100% on EVs

Canada intends to apply a 25% surtax on imports of steel and aluminum from China and a 100% surtax on all Chinese-made electric vehicles in October in an effort to protect its domestic industries from alleged unfair trade practices, the government said Aug. 26.

The surtax on EVs is to take effect Oct. 1, while the 25% surtax on Chinese steel and aluminum will be effective Oct. 15, the government's Department of Finance said in a statement.

"Canadian workers and critical sectors, including steel and aluminum...are facing an intentional, state-directed policy of overcapacity, undermining Canada's ability to compete in domestic and global markets," Deputy Prime Minister and Minister of Finance Chrystia Freeland said. "This is why our government is moving forward with decisive action to level the playing field, protect Canadian workers, and match measures taken by key trading partners."

Steel and aluminum

The government released an initial list of steel and aluminum products for public comment Aug. 26. A final list of goods subject to the surtaxes will be announced by Oct. 1, it said.

The surtaxes will not apply to Chinese goods that are in transit to Canada on the day on which these surtaxes come into force, the government said.

EVs

The 100% surtax on EVs includes electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans and will apply in addition to the "Most-Favoured Nation import tariff" of 6.1% that currently applies to EVs produced in China and imported into Canada, the government said.

Additionally, Canada's government is launching a second 30-day consultation concerning other sectors "critical to Canada's future prosperity," including batteries and battery parts, semiconductors, solar products, and critical minerals.

It also intends to limit eligibility for the Incentives for Zero-Emission Vehicles (iZEV), the Incentives for Medium and Heavy Duty Zero Emission Vehicles (iMHZEV), and the Zero Emission Vehicle Infrastructure Program (ZEVIP) to products made in countries which have negotiated free trade agreements with Canada.

Canada's government said it intends to review these measures within a period of one year from their entry into force and the actions may be extended for a further period of time and supplemented by additional measures, as appropriate.