Source: Gasgoo
On Dec. 5, Parliamentary budget Officer Yves Giroux said in a report that Canada expects to raise about C $100 million ($71.4 million) a year from new tariffs on Chinese steel, aluminum and electric vehicles.
Giroux’s latest report, however, does not take into account the impact of China’s trade retaliation, or the impact of US President-elect Donald Trump’s possible across-the-board 25 per cent tariffs on Canadian goods.
Canadian Finance Minister Chrystia Freeland announced a 100 percent tariff on Chinese-made electric vehicles in August and a 25 percent tariff on Chinese steel and aluminum, which took effect in October.
Giroux estimates that Canada’s electric vehicle tariffs on China will actually result in lower revenue for Canada, because nearly all electric vehicles imported from China to Canada currently come from Tesla’s Shanghai factory, and Tesla is likely to circumvent the new tariffs by exporting vehicles to Canada from factories outside China.
Because Canada previously imposed a 6.1 percent tariff on Chinese cars, it would lose that revenue if Tesla sourced cars from tariff-free regions such as the United States. That would mean lost revenue of just over $100 million a year, Giroux concluded.
Giroux estimates that Canadian demand for Chinese steel and aluminum will be reduced by nearly 50 percent as a result of the new tariffs, but it still has the potential to bring in more than C $200 million a year in revenue.
Overall, Giroux said in the report, Canada’s steel and aluminum tariffs on China would have a “minimal” impact on gross domestic product. He said output from Canadian metals and utilities would increase, while output from manufacturing and construction would likely decline due to higher costs for companies to source metals elsewhere or pay new tariffs.
Image Source: Tesla
Volvo and Polestar have also been importing a small number of cars from China to Canada.
Volvo Cars Canada revealed in October that it imported the new EX30, XC60 and a “very limited number” of S90 sedans from China to Canada.
In 2025, Volvo plans to shift production of the EX30 and XC60 to other plants, partly in response to a Canadian crackdown on Chinese-made cars. Volvo Canada said it will begin sourcing the XC60 from Torslanda, Sweden, in the first quarter of 2025 and will move EX30 production to its Ghent, Belgium, plant in the first half of 2025.
Polestar’s plans for the Chinese-made Polestar 2 model are unclear.
