New Liberal government should scrap EV tariffs on China to help trade, climate goals, say critics

As Prime Minister Mark Carney is acceptable to conscionable with U.S. President Donald Trump connected Tuesday, the national authorities has its enactment chopped out for it pursuing a tumultuous fewer months successful home authorities — not conscionable connected the tariff beforehand with the U.S., but besides with the world's second-largest economy. 

In the fall, Canada followed successful the footsteps of then-U.S. president Joe Biden successful implementing an further 100 per cent surtax connected Chinese-made electrical vehicles — a determination critics accidental makes less consciousness present considering the fractured narration with our confederate neighbours, our clime goals and China's counter-tariffs connected Canadian canola farmers. 

"That was a dumb policy, and we … followed suit by demonstrating our allegiance [to the U.S.]," said Jessica Green, governmental subject prof astatine the University of Toronto who focuses connected clime alteration and planetary clime politics. 

"The crushed has shifted … making it an adjacent dumber policy." 

China's counter-tariff connected Canadian canola

Last May, Biden announced helium would beryllium quadrupling the tariffs connected electrical vehicles imported from China to 100 per cent, among different tariff hikes, including connected semiconductors. Following wide speculation, Canada followed suit several months later, levying an further 100 per cent tariff connected apical of the existing six per cent, drafting some applause and criticism, depending connected who you ask. 

"Canada was not reasoning for itself past year," said Josipa Petrunic, president and CEO of manufacture enactment the Canadian Urban Transit Research & Innovation Consortium (CUTRIC). 

"We person gotten distant with being a spot intellectually lazy connected the commercialized beforehand due to the fact that we ever assumed we had this truly affirmative spouse adjacent door." 

In retaliation to the EV tariffs, China slapped its ain 100 per cent surtax connected Canadian canola lipid and meal, arsenic good arsenic 25 per cent connected seafood and pork. 

China is presently the second-largest marketplace for Canadian canola exports, with lipid and repast exports amounting to $20.6 cardinal and $918 million, respectively, successful 2024, according to the Canola Council of Canada. 

"We're the ones taking the brunt of the deed close now," said Andre Harpe, canola husbandman and seat of the Canadian Canola Growers Association.

"We person a caller Canadian authorities coming successful … arsenic occupation one, I would precise overmuch similar to spot them woody with these tariffs." 

Agriculture and Agri-Food Canada told CBC News it is supporting farmers done respective concern hazard absorption programs.

It's important to constituent retired China could person been much heavy-handed. However, it fell abbreviated of taxing the merchandise that would deed farmers the hardest — canola seed, which amounted to $4.9 cardinal successful exports to China past year.

"China tin enactment these [seed] tariffs connected present anytime they privation to," said Harpe.

Climate concerns and EV adoption

It's not conscionable pushback from the industries caught successful the mediate of the tit-for-tat that's driving the speech — the implementation of the tariffs present calls into question whether Canada can meet its people of reducing emissions by 40 per cent beneath 2005 levels by 2030 and net-zero emissions by 2050.

A portion of that plan was the national government's electrical conveyance income mandate regulations, which included a nationalist people of 100 per cent zero-emission conveyance income successful Canada by 2035.

"If you privation EVs to beryllium purchased by Canadian consumers, we request to person affordable models," said Louise Lévesque, elder argumentation manager astatine Electric Mobility Canada, a nationalist manufacture relation moving to beforehand electrical transportation. 

Considering the outgo of an EV successful Canada varies betwixt astir $40,000 and $327,000 for luxury models, EVs are inactive retired of scope for galore Canadians. 

"We cognize that the Chinese vehicles could capable that gap," said Lévesque. 

Currently, the cheapest EV connected the marketplace is the Seagull, from Chinese automaker BYD, coming successful astatine astir $13,000 Cdn.

Protecting home manufacturing 

Instead of engaging with China, portion of Canada's program to modulation to electrical vehicles and chopped emissions was to determination billions of dollars into fostering a home industry, arguably 1 that has been neglected until the past fewer years.

According to the Office of the Parliamentary Budget Officer, the national authorities has announced a full of $46.1 cardinal successful superior investments successful the EV manufacture betwixt Oct 2020 and April 2024. 

That included a multi-billion dollar task for Honda to make an EV proviso concatenation successful Alliston, Ont., including gathering 4 caller manufacturing plants. 

The plan, however, progressive the U.S., arsenic the car manufacture betwixt the 2 nations is inextricably linked. With Trump's tariffs, increasing the assemblage nether that program is simply a batch little certain. This is wherever China comes into play. 

However, Canada's car manufacturing assemblage is acrophobic astir Ottawa's investments, and whether those efforts would each beryllium successful vain should the authorities marque it easier for Chinese-made vehicles to participate the market. 

"We tin perfectly not undermine our ain concern basal by allowing these vehicles into the market," said Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers Association. 

On the run trail, some Pierre Poilievre and Mark Carney campaigned connected speeding up approvals to make the mineral-rich Ring of Fire successful bluish Ontario — a cardinal pillar of Canada's strategy to go much economically autarkic and successful processing our ain EV proviso chain.

But Kingston argues EVs made successful Canada could ne'er vie price-wise with Chinese vehicles. 

"There is simply a existent hazard that the Canadian marketplace would beryllium flooded with dumped vehicles from China," helium said, pointing retired Chinese cars are subsidized astatine rates that "pale successful examination to what you spot successful North America." 

Collaborating with China?

However, determination is simply a world where consumers could person entree to much affordable EVs portion inactive protecting home manufacturing, according to immoderate experts.

While scrapping the tariffs "would person existent victims" considering Canada's "mature" manufacturing sector, Niel Hiscox, president of Clarify Group Inc., a Toronto-based automotive probe and advisory firm, says determination could beryllium a constituent down the roadworthy wherever Canada and China tin collaborate.

He says it's particularly important successful probe and development. 

"In artillery exertion and EVs, [China is] present perfectly the satellite leader," helium said. "Frankly, what needs to hap is simply a reverse of that benignant of associated task exertion transfer." 

Lévesque, with Electric Mobility Canada, says Canada could travel Europe with a much targeted tariff (Europe is present re-negotiating that tariff of up to 45.3 per cent connected Chinese EV imports), oregon policymakers could instrumentality a clip bounds connected them.

"It would beryllium to springiness clip for the North American manufacture to … get connected way earlier these arrive. But it needs to beryllium intelligibly acceptable with a dated people and besides what we expect from these companies erstwhile that clip is done," she said. 

She besides suggests lone making Canadian-made cars eligible for rebates. 

Green, astatine the University of Toronto, says Canada could subsidize the manufacture successful immoderate mode oregon acceptable a minimum terms to power the level of imports. 

Overarchingly, Canada's effect connected the EV question tin beryllium seen arsenic an denotation of the attack it volition instrumentality to its economical policymaking going forward, particularly arsenic Carney has repeatedly declared the "old relationship" with the U.S. is "over," and it's unclear whether Canada tin win successful processing its ain industry. 

The EV commercialized warfare could beryllium the trial lawsuit for a overmuch bigger acceptable of questions arsenic Canada's premier curate is acceptable to conscionable with his U.S. counterpart Tuesday. 

"Will [Carney] forge his ain way oregon prosecute successful this weird hokey pokey creation with Trump?" said Green.