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

As Prime Minister Mark Carney prepares to meet with U.S. President Donald Trump, the Canadian government faces numerous challenges on the trade front, particularly in its relationship with both the U.S. and China. The decision to implement a 100 per cent surtax on Chinese-made electric vehicles last fall, following the U.S.’s lead, has come under scrutiny in the wake of strained relations with both countries and China’s retaliatory tariffs on Canadian canola farmers.

Critics argue that Canada’s alignment with the U.S. on this issue was shortsighted and detrimental to its own interests. The tariffs imposed by China on Canadian canola oil and meal have had a significant impact on the agricultural sector, with farmers feeling the brunt of the trade war.

Furthermore, the tariffs on electric vehicles call into question Canada’s ability to meet its emissions reduction targets, as the country aims to achieve 40 per cent below 2005 levels by 2030 and net-zero emissions by 2050. The implementation of the EV tariffs also raises concerns about the affordability of electric vehicles for Canadian consumers, with prices ranging from $40,000 to over $300,000.

In an effort to foster a domestic electric vehicle industry, the Canadian government has invested billions of dollars in capital investments. However, concerns have been raised about the impact of allowing Chinese-made vehicles into the market, potentially undermining domestic manufacturing efforts.

While some experts suggest collaboration with China in research and development, others argue for more targeted tariffs or time limits on imports to protect the domestic industry. The upcoming meeting between Carney and Trump will be a crucial test for Canada’s economic policymaking and its ability to navigate the complexities of the global trade landscape.

Overall, the EV trade war serves as a microcosm for the larger challenges facing Canada in balancing its economic interests with international relations. The decisions made in the coming months will shape the country’s approach to trade and industry development in the years to come.