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the "calculation" behind canada's tax on chinese electric vehicles

2024-09-07

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international affairs observer zhang siyuan

not long ago, the canadian government announced a 100% tariff on electric vehicles imported from china, with the final tax rate reaching 106.1%. canada followed the united states and the european union in suppressing chinese electric vehicles, and the so-called "overcapacity", "non-market policies and behaviors", and "unfair competition" listed as reasons are also blatant plagiarism of the "intellectual property rights" of the united states and the european union. even the canadian media criticized the canadian government for parroting.

is the canadian government trying to protect the interests of its electric vehicle industry and workers? canada accuses the chinese government of excessively subsidizing the electric vehicle industry, dumping excess production capacity, and affecting the development of related industries in other countries. in fact, china's electric vehicle industry leads the world by relying on huge market demand, ever-changing technological innovation and complete industrial chain advantages. speaking of subsidies, the canadian government itself provides a lot of subsidies to the electric vehicle industry. the federal and local governments of canada announced that they would provide about 37 billion canadian dollars in tax breaks and subsidies to volkswagen and other companies to build super battery factories in canada. according to the logic of the canadian side, with such a large subsidy, canada's own electric vehicles should have been seen all over the world. seeing the sudden rise of chinese electric vehicles, canada is anxious, but does not want to focus on improving its competitiveness. it always wants to take shortcuts and ban it. however, sending chinese electric vehicles off the track will not accelerate the development of canada's auto industry. it will only cause canada's own electric vehicle industry to be out of the market and unable to keep up with the pace of development, which will ultimately be counterproductive.

is canada trying to protect the interests of consumers? according to statistics canada, the number of pure electric vehicle registrations in canada increased by 43.3% year-on-year in the first quarter of 2024, and the demand for electric vehicles in canada is rising rapidly. chinese electric vehicles have mature battery technology and intelligent driving experience, and their quality has attracted worldwide attention. the canadian government's mysterious operation of restricting the import of high-quality and low-cost goods will only make innocent canadian consumers pay the bill, and they will have to switch to more expensive cars under the "coercion" of the government. this completely deviates from the principles of market economy and infringes on the right of choice of canadian consumers.

is canada trying to maintain the fairness of the international trade order? canada accused china of "unfair competition" in the electric vehicle industry, disrupting the stability of the international supply chain, and seriously violating wto rules. but even the united states and the european union concealed the so-called "investigation" before the final tariff increase, and canada omitted this link and directly and simply decided to increase tariffs. this is a naked violation of wto rules and principles, and a blatant political manipulation. it doesn't even want a fig leaf, so where is the credibility and image? it should be noted that canada and the united states "fell out" over the cork lumber tariff, and the canadian government begged the united states to seek a negotiated solution. why did it take action without saying a word when it came to china, throwing the so-called "rules" behind its back?

as one of the most loyal allies of the united states, canada has enacted measures involving the largest number of electric vehicle models imported from china and the heaviest tax increases, and has rushed to the front under the manipulation of the big brother of the united states. canada has repeatedly said that this decision was made independently, but the day before the canadian government announced the tax measures, us president's national security advisor sullivan visited canada and attended the canadian cabinet's annual retreat. sullivan also publicly stated that it would be beneficial for both the united states and canada to adopt a united front and coordinated approach on the issue of electric vehicles. if you say that there is no american shadow behind canada's taxation of chinese electric vehicles, it would be deceiving oneself. but in fact, the united states has postponed the announcement of the decision to impose tariffs on electric vehicles imported from china twice. after visiting canada, sullivan immediately went to china to conduct strategic communication with china on stabilizing sino-us relations. canada's charge this time is probably to help the americans get out of trouble, but if one day the americans turn around, i don't know how canada will deal with it.

canada claims to be a pioneer in environmental protection and climate change response. when it comes to climate change reduction, it often asks china to fulfill its responsibilities as a major country. however, when china vigorously develops new energy industries, it changes color and tries to stop it. isn't this the behavior of ye gong who loves dragons more than ye gong? canada has highly politicized and instrumentalized economic and trade issues, and excluded china from the canadian market, which has not only increased its own low-carbon transformation costs, but also slowed down the global deployment of clean technologies. it is a lose-lose behavior for both the economy and the climate.

on september 3, china's ministry of commerce announced that it would launch an "anti-discrimination investigation" into the relevant restrictive measures taken by canada, and intends to bring canada's relevant practices to the wto dispute settlement mechanism. this is the firm attitude of the chinese government. the chinese people welcome exchanges and cooperation, which is why canadian foreign minister joly visited china. the chinese people will also resolutely fight back against suppression and containment. canada plans to start imposing tariffs on chinese electric vehicles on october 1, and will also launch public consultations on chinese-made batteries, key minerals and other industries in the next stage. we advise canada to think twice before acting.