MPs ponder new tariffs against China

The Commons trade committee agreed to open hearings on new tariffs against China on Wednesday. Cabinet wrapped up public dialogue on tariffs to counter Chinese economic dominance earlier this month. 

"Our inaction invites further aggression from countries like China that will see our delay as weakness," said Conservative MP Ryan Williams, sponsor of the motion.

It asked that the committee study "the impact of tariffs on local industries and use of trade remedies to protect against Chinese electric vehicles." MPs also asked for testimony from Finance Minister Chrystia Freeland, Trade Minister Mary Ng, Industry Minister François-Philippe Champagne and Foreign Minister Mélanie Joly to explain retaliatory measures under consideration.

In June, Minister Freeland blamed China for flooding the market with inexpensive electric vehicles (EVs), as part of an "intentional, state-directed policy." She promised "clear, strong, decisive action" to counter "unfair competition."

Yet a recently finished 30-day public consultation on taxing Chinese electric vehicles has suggested no remedies to date, reported Blacklock’s Reporter. Alternatives to tariffs could include exclusions from the $5,000 EV rebates and broader investment restrictions. 

On August 1, the United States increased tariffs to 100% on Chinese EVs. They imposed additional tariffs on Chinese steel and aluminum, semiconductors, solar cells, batteries, and critical minerals on May 14.

"We face a contentious relationship with China," said MP Williams. "We have had allegations of foreign interference. We have had unfair trade practices… electric vehicles, aluminum and steel."

All of this while Federal and provincial governments have allocated more than $52 billion in subsidies to ensure EVs are manufactured domestically.

President Joe Biden is set to announce a significant increase in tariffs on various Chinese imports, including electric vehicles, battery components, semiconductors, microchips, and steel and aluminum.

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The Canada Pension Plan Investment Board recently disclosed $604 million in shares in Chinese EVs, but no reason as to why was given.

China is a major EV battery supplier, as well as battery components globally, accounting for 80% of all lithium-ion EV batteries worldwide in 2021. Millions more were invested in Chinese battery manufacturers.

"The stakes really could not be higher for Canada’s economic future," said MP Williams. "We talk about the money invested but we ought to talk about jobs. The Americans didn’t hesitate to protect jobs and industries. Canadians right now are waiting three months to hear whether we will mirror the tariffs put on those industries."

Liberal MPs objected to the insinuation they are not supportive of Canada’s auto industry. "Tariffs work," said Liberal MP Terry Sheehan, the parliamentary secretary for labour. 

More than $600 million in pension dues have been invested in China’s electric vehicle sector, according to disclosures from the Canada Pension Plan Investment Board.

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However, one Liberal MP cautioned that Canada should be wary of following the U.S. lead on tariffs.

"Canada is not the United States," said MP Chandra Arya. "The United States is a superpower, a major economic power, a major military power. Every single country thinks twice before they retaliate against any move the United States tries to make including imposing import duties. We are not the United States."

"Any move to impose duties on Chinese electric vehicles will certainly result in retaliation by China," she continued. "We have to be clear. Which domestic sector are we willing to throw under the bus to impose this?"

"Is it the canola growers who export to China or the beef exporters or the pork exporters?" MP Arya asked the trade committee. "Which of these Canadian exports to China are we willing to sacrifice to impose these duties on electric vehicles?"

With the government of Canada's plan to sell only zero-emission vehicles by 2035, Rebel News took to the streets of Calgary, a city dependent on oil and gas to hear people's thoughts on the 'green' revolution.

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The only Chinese EVs currently sold in Canada are produced by Tesla Inc., which reported a 9% drop in earnings due to sagging demand. Electric vehicle purchases plateaued in the third quarter of 2023, according to Statistics Canada. 

"Workers and the auto sector currently face unfair competition from China," Minister Freeland earlier told reporters. She made no mention of pensioner investments in the Chinese EV sector. 

"We are living in a world right now where China is taking advantage of the global economic system," she said. "We know we need to defend our national interest and we will."