PBO says tariffs on Chinese EVs, aluminum and steel will increase federal revenues by $473M
Canada’s Tariffs on Chinese Electric Vehicles, Aluminum, and Steel to Boost Federal Revenues
The parliamentary budget officer has projected that Canada’s tariffs on Chinese electric vehicles, aluminum, and steel will bring in an additional $473 million in federal revenues over the next five years.
Background
Starting in October, the Canadian government implemented a 100 per cent tariff on Chinese-made electric vehicles and a 25 per cent tariff on steel and aluminum imports. This move was in response to what the Liberal government described as unfair trading practices by China, as well as concerns over the country’s environmental and labor standards.
The government argued that China’s ability to undercut prices and flood the market with products was detrimental to both the environment and Canadian workers. Pressure from industry groups, including automakers, steel manufacturers, and aluminum plants, also played a role in the decision to impose the tariffs.
Impact of Tariffs
According to the parliamentary budget officer’s estimates, the tariffs are expected to lead to a 50 per cent decrease in aluminum and steel imports from China. The increase in tariffs is likely to make these imports less competitive in the Canadian market.
Electric vehicle imports from China had seen a significant rise in 2023, particularly due to Tesla’s decision to fulfill Canadian orders from its Shanghai plant. However, the PBO predicts that Tesla may now look to source vehicles from other production facilities outside of China.
This informative article provides insights into the impact of Canada’s tariffs on Chinese electric vehicles, aluminum, and steel on federal revenues and imports. The detailed analysis by the parliamentary budget officer sheds light on the expected outcomes of these tariffs on the Canadian economy.
