The trade war over Chinese electric vehicles (EVs) seems to be expanding globally as Canada has become the latest country to join the fray. Following the footsteps of the United States (US) and European Union (EU), the Canadian government is reportedly preparing to impose tariffs on Made-in-China (MIC) EVs.

The trend of higher tariffs on Chinese EVs started last fall when the EU Commission declared that it would launch an anti-subsidy probe, claiming that electric cars built in China and imported to Europe were enjoying an unfair advantage over locally-built vehicles.

As the probe was eventually conducted by the EU Commission, the Biden Administration-led US also hiked its tariffs on China-made EVs. To be more specific, the US increased tariffs on China-made EVs from 25 per cent to 100 per cent. Following the footsteps of the US, the EU Commission threatened to impose its own tariffs on Chinese EVs even before releasing the findings of its probe.

Retaliating to the higher European and American tariffs, China also threatened higher tariffs on vehicles imported from these two regions. German automobile manufacturers reached across the aisle and helped ease the trade war-related tensions. Eventually, the EU Commission hinted that its tariffs on Chinese EVs could reach 48 per cent. Higher European tariffs are slated to take effect in early July this year.

Becoming the latest nation to join the trade war, Canada has also hinted that it could hike its tariffs on Chinese EVs. It may be noted here that Canada strong ties with the US as well as European nations. Showing solidarity with the US and EU, Canada is planning to block a potential loophole that China could use to enter its EV market.

As per sources familiar with the matter, Prime Minister Justin Trudeau-led Canadian government is preparing to impose hefty tariffs on imported Chinese EVs.

Using social networking platform “X,” Ontario Premier Doug Ford recently stated, “Taking every advantage of low labour standards and dirty energy, China is flooding the market with artificially cheap electric vehicles. Unless we act fast, we risk Ontario and Canadian jobs.”

The escalating trade war on Chinese EVs underscores the complex interplay economic protectionism and geopolitical strategy. Aligning with the US and EU, in terms of tariffs on Chinese EVs, China will be able to fortify its domestic market against “unfair” competition from overseas.