On Monday, Canadian Minister of Finance Chrystia Freeland announced that the country would be launching on July 2 a 30-day consultation period on potential policy responses to China's "unfair competition" in the electric vehicle industry. The measures could include a surtax on imports of Chinese EVs under Section 53 of the Customs Tariff Act, Freeland said.
"If Canada insists on politicizing and weaponizing economic and trade issues to unilaterally impose tariffs on Chinese exports, China will take resolute actions to defend its legitimate rights and interests," the embassy said in a statement.
China’s development and competitive advantage in the EV industry is the result of persistent technological innovation, well-established industrial supply chains and full market competition, the statement said. The Chinese industry does not depend on government subsidies and the accusation over China's alleged overcapacity is "completely groundless," the embassy stated.
The diplomatic mission also pointed out that Canadian media have reported that the only Chinese-made EVs imported to Canada are Tesla vehicles manufactured in Shanghai. The embassy warned that the new tariffs would be in violation of World Trade Organization (WTO) rules and have negative consequences for Chinese-Canadian ties.
The Biden administration said in mid-May it was slapping a 100% tariff on Chinese-made electric vehicle imports to the United States in a bid to stop cheap Chinese EVs from "flooding" the domestic market.
In lockstep with the US, the European Commission in June made a provisional decision to impose extra duties on imports of Chinese EVs due to alleged unfair subsidization starting from July if talks with China did not result in an effective solution. Beijing has warned it will file a lawsuit with the WTO if the EU goes ahead with the plan.