Chinese-made EVs are now subject to a 100% tariff. What does this mean for Canadians?

Canada's new tariff on electric vehicles from China will reverberate through a multitude of industries and could lead to repercussions well beyond the electric vehicle market, according to analysts.

The 100 per cent tariff on imports of Chinese-made EVs (and some hybrids), including cars, buses, trucks and delivery vehicles, takes effect on Tuesday after a 30-day consultation period over the summer. A 25 per cent surtax on steel and aluminum imports from China will kick in on Oct. 15.

While the move is meant to keep cheap, well-made electric cars from China at bay in order to grow and protect Canada's nascent EV sector, critics warn there could be a number of consequences, including to environmental goals and other Canadian sectors as a trade war looms.

"We don't see it as very helpful," said Andrew Bell, a director with the Electric Vehicle Association of Alberta.

Fourteen years ago, Bell bought his first plug-in hybrid and has been trying to get other drivers on board ever since. He calls the tariff an "unnecessary barrier" to importing Chinese cars to spur adoption because it would effectively double the price of EVs from China.

"Here, the Canadian government is trying to encourage Canadians into electric vehicles. Here's a high-quality, low-cost option," he said.

Currently, the cheapest EV on the market is the Seagull, from Chinese automaker BYD, coming in at roughly $13,000 Cdn.

While Chinese cars like this aren't in Canada yet, manufacturers have been lobbying the federal government to slap on high tariffs to prevent them from flooding the market.

Canada is also currently engaged in a 30-day consultation related to surtaxes on Chinese batteries and critical minerals after it learned about "unfair competition from China, including pervasive subsidization, and lack of rigorous labour and environmental standards," according to an announcement on the Department of Finance website.

When Prime Minister Justin Trudeau announced the EV tariff in late August amid industry pressure, he said the goal was to "level the playing field for Canadian workers." He also blamed what he alluded to as China's unfair state subsidization of production.

"Actors like China have chosen to give themselves an unfair advantage in the global marketplace, compromising the security of our critical industries and displacing dedicated Canadian auto and metal workers. So, we're taking action to address that," he said.

For months there was speculation as to how Canada would approach the issue, given that the United States, Canada's biggest trading partner, slapped on a 100 per cent tariff earlier this year. The European Union took a more measured stance and increased its surtax on Chinese EVs from 10 per cent to 36.3 per cent.

Canada's move was considered a win for those in the automotive sector, as well as those working in research and development.

"We want the high-quality jobs for students and all the trickle-down effects of the automotive sector," said Olivier Trescases, an engineering professor at the University of Toronto and director of its Electric Vehicle Research Centre.