AutoBeta(AutoBeta.net)08/28 Report--

On August 26th, Canadian Prime Minister Justin Trudeau announced the policy details in Halifax, announcing a 100% tariff on electric vehicles from China from October 1, 2024. It is worth mentioning that tariffs are imposed not only on pure electric vehicles, but also on plug-in hybrid passenger cars, gas-electric hybrid vehicles, fuel cell vehicles, and passenger cars, trucks, buses and trucks. It is understood that Canada's current tax rate on Chinese electric vehicles is 6.1%, and the new tariff will be levied on this basis.

In the evening, the official statement of the Chinese Embassy in Canada said that in spite of China's repeated opposition and solemn representations, the Canadian government insisted on imposing tariffs on Chinese electric vehicles. The Chinese side expresses strong dissatisfaction and firm opposition to this. Canada's move is typical of trade protectionism and political dominance, ignoring WTO rules and inconsistent with Canada's self-proclaimed advocacy of global free trade and climate change. This move will undermine the normal economic and trade cooperation between China and Canada, damage the interests of Canadian consumers and enterprises, and is not conducive to Canada's green transformation and global efforts to deal with climate change. China urges Canada to respect objective facts, abide by WTO rules, immediately correct erroneous practices, and refrain from politicizing economic and trade issues. China will take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.

Canada's move comes after the United States and the European Union imposed tariffs. In May this year, the White House announced that it would significantly increase tariffs on a series of Chinese imports, such as electric vehicles, including electric vehicles from China, from 25% to 100%. If you include the 2.5% base tariff imposed by the United States on electric vehicles, the final tax rate will reach 102.5%. In addition, the tariff rate on lithium batteries for electric vehicles will be raised from 7.5% to 25%, and the tariff rate on battery parts will be raised from 7.5% to 25%. In August, the European Commission disclosed to relevant parties a draft decision to impose a final countervailing duty on pure electric vehicles imported from China, in which BYD, Geely Motor and SAIC will add 17.0%, 19.3% and 36.3%, respectively. Other cooperative companies levy 21.3%, other non-cooperative companies levy 36.3%, and Tesla, as a Chinese exporter, implements a separate tariff rate of 9% at this stage.

Canada plans to impose tariffs on Chinese electric vehicles, but in fact it will not hinder the globalization of China's electric vehicle industry chain and will have little impact on China's own brands. At present, Chinese-made electric cars exported to Canada mainly come from Tesla's Shanghai factory, while as an American company, Tesla can supply Canada through its US or German factories to avoid tariffs. As for other Chinese brands, very few electric cars are exported to Canada at this stage. Recently, however, it has been reported that BYD plans to enter the Canadian market and has met with Canadian dealers to discuss the opening of a distribution store. As a result, Canada's tariff is more like a preventive measure, which may largely prevent Chinese-made electric cars from entering Canada.

Both the US and Canadian governments claim that China's policies of overcapacity and oversupply will weaken the auto industry, arguing that China has gained an unfair competitive advantage through subsidies. Previously, the Chinese Consulate in Toronto issued an article refuting the "theory of overcapacity" as a false proposition. Officials say all countries produce and export products that have a comparative advantage. 80% of cars produced in Germany, 50% in Japan and 25% in the United States are exported, while only 12.7% of new energy vehicles made in China are exported, accounting for only 8% of global sales. At the same time, the average selling price of Chinese electric vehicles in Europe is higher than the domestic price, and there is no "low-price dumping". It is a typical double standard to criticize China with the so-called "overcapacity theory".

From the perspective of China itself, at present and for some time in the future, China's electric vehicles will mainly serve the domestic market, while from a comprehensive point of view, Chinese consumers' demand for new energy vehicles will continue to rise in the future. Bloomberg comprehensive industry data analysis, Chinese car dealers inventory is not high, can not come to the conclusion of "overcapacity."

In the face of such high tariffs, it is already difficult for China to export to Canada, but it can enter by building factories overseas and producing electric cars in other regions. In fact, many Chinese car companies are actively laying out the matter of building factories overseas, and in North America and Mexico, they have become the choice of some Chinese car companies. Not long ago, SAIC announced plans to build a manufacturing plant and an R & D center in Mexico to turn Mexico into a market hub in Latin America.

However, there is also some uncertainty. Earlier, US presidential candidate Donald Trump said that if he could return to the White House, he would impose new tariffs to prevent Chinese and other automakers from exporting cars from Mexico to the United States. these will undoubtedly add more obstacles to the road to North America for Chinese automakers.

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