Canada And U.S. Eye-To-Eye on Chinese Tariffs

Aug. 29, 2024
By: Pietro N. Bianchi

On August 26, 2024, the Department of Finance of Canada announced that it will be imposing a substantial surtax, or import tariff, on products from China. Specifically, there will be a 100% surtax on all Chinese-made electric vehicles and a 25% surtax on certain steel and aluminum products. These rates match the U.S.’s planned increases for Section 301 tariffs. Steel and aluminum importers should note that these will stack on top of the existing Section 232 duties. Unlike the U.S. tariff increases, which were delayed, it appears likely that the Canadian surtax increase will be put into effect promptly. Canada intends to implement the 100% surtax on Chinese-made EVs October 1 and implement the 25% surtax on steel and aluminum products October 15.

The Canadian Department of Finance stated that these surtaxes are a response to China’s trade policies, which were described as intentional, state-directed, and unfair. The goal of the surtaxes is to protect the “125,000 good-paying Canadian jobs” in its automotive industry and the 130,000 jobs in its steel and aluminum industry. The steel and aluminum surtax is also being implemented “to prevent trade diversion resulting from recent actions taken by Canadian trading partners.” There is an ongoing debate over whether past trade policies targeting China’s unfair trade policies have influenced Beijing’s behavior. Whether the new Canadian surtaxes will benefit Canadian industry and commerce as a whole is yet to be seen.

If you have questions about China specific tariffs or policies do not hesitate to contact an attorney at Barnes Richardson, & Colburn LLP.