Minister Says Canada Weighs Tariff Hike on Chinese EVs following US

TMTPost-- Canada could follow suit after its neighbour and allay U.S. raised tariffs on Chinese electric vehicles (EVs), a new risk of intensifying tension between China and the West.

Credit：Xinhua News Agency

Canada is exploringwhether it needs to hiketariffs on Chinese-made EVs after the White House announced major new levies on them,a Bloombergreport Friday citedMary Ng, the Minister of Export Promotion, International Trade and Economic Development. "We are looking at this very carefully and we have an open dialogue with our American partners," Ng said in a phone interview from Peru, where she is attending meetings of the Asia-Pacific Economic Cooperation forum that day.

The White House announced Tuesday President Biden directed his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China. It said that the actions, following an in-depth review by the United States Trade Representative, are taken to protect American workers and American companies from China’s unfair trade practices.

According to the statement, the Biden administration will sharply ratchet up tariffs on semiconductors, EVs,EV batteries, battery parts, solar cells and steel and aluminum, and impose new tariffs on cranes and medical products. The tariff rate on EVs under Section 301 will increase to 100% in 2024, quadrupling the current tariff of 25%. The tariff rate on semiconductors will increase from 25% to 50% by 2025. The tariff rate on lithium-ion EV batteries will increase from 7.5%% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024. The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024. The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.The tariff rate on ship-to-shore cranes will increase from 0% to 25% in 2024. The tariff rates on syringes and needles will increase from 0% to 50% in 2024.

Canada currently imposes a tariff of about 6% on Chinese vehicles. Asked whether the countrymay need to align its own tariffs with the US, Ng said the government is speaking with US officials about the policy, “and we are absolutely looking at this.” The minister underlined Canada’s main focus is on producing electric vehicles domestically.

China has reiterated its opposition to new U.S. tariffs. China firmlyopposed the United States' tariff hikesand has lodged stern representations against the move, according to remarks of a spokesperson released at website of the Ministry of Commerce of China (MOFCOM). With its domestic political considerations, the U.S. government abused the Section 301 tariff review process to further raise the Section 301 tariffs on some Chinese products, which is a classic example of political manipulation, and China expressed strong dissatisfaction with such action, the spokesperson said. The spokesperson added the WTO has already ruled those tariffs against WTO rules, however, instead of making corrections,the United States maintained its wrong way and chose to double its fault.

Prior to the annoucement, Chinese Foreign Ministry spokesperson Wang Wenbin said China opposes unilateral tariffs that violate WTO rules and will take all measures necessary to defend our legitimate rights and interests. Wang commented on Wednesday that the recent U.S. tariff hike will only significantly drive up the cost of imported goods, inflict more loss on American companies and consumers, and make the US consumers pay even more. 92% of the cost for the tariffs hike falls on American consumers and average US household expenditure increases by 1,300 dollars annually, Wang quoted Moody’s estimates. Wang said China urges the U.S. to earnestly observe WTO rules and immediately cancel the additional tariffs. He reiterated Beijing will take all measures necessary to defend its rights and interests.