Canada stated on Monday it could impose 100% import tariffs on China-made electrical automobiles, following within the footsteps of the U.S. and the European Union in slapping taxes over issues associated to unfair subsidies.

Canada already imposes 6.1% tariff on EVs manufactured in China and imported into Canada, the government said on Monday. The 100% tariff will come into impact from Oct. 1.

The nation can even put a 25% tariff on China-made metal and aluminum imports, efficient Oct. 15. China is the third-largest nation for metal imports into Canada, in accordance with the Canadian Steel Producers Association.

Canada’s EV, metal and aluminum industries face “unfair competitors” and commerce practices from China, the federal government’s finance division stated. The U.S. and EU have made similar allegations, citing China’s “overcapacity,” which China has referred to as “groundless.”

Canada stated the brand new measures search to “stage the taking part in subject for Canadian employees” and permit Canada’s EV, metal and aluminum producers to compete domestically and globally.

These steps will probably be reviewed one yr from their efficient dates and could also be prolonged or supplemented with extra measures.

This comes because the Biden Administration in May introduced a 100% tariff on Chinese language EVs. The EU additionally hit China-made EVs with higher tariffs in July, although it slashed some of the planned tariffs on China-made Tesla EVs in addition to different Chinese language EV makers final week.

Vincent Chan, China strategist at Aletheia Capital, informed CNBC’s “Avenue Indicators Asia” on Tuesday that Canadian tariffs might damage China’s EV development momentum however “won’t solely remove it.”

In an announcement on Monday, a spokesperson of the Chinese language Embassy in Canada stated China expresses “strong dissatisfaction and resolute opposition” to the transfer, including that it “violates the WTO guidelines” and “will harm commerce and financial cooperation” between China and Canada. The spokesperson added that China will take vital motion to guard its corporations.

“I want to emphasize that the speedy improvement of China’s EV business is a results of persistent technological innovation, well-established industrial and provide chains, and full market competitors,” the spokesperson stated, including that China’s EV business does not depend on authorities subsidies.

Chinese language EV maker BYD opened its first bus meeting plant in Canada in June 2019 and rolled out electrical buses in Toronto. Nonetheless, Chinese language manufacturers are nonetheless not a serious participant within the nation, Chinese state media Global Times reported in June.

Vehicle imports from China to Canada’s largest port in Vancouver jumped 460% yr over yr to 44,356 in 2023, when Tesla began delivery EVs made at its Shanghai manufacturing unit to Canada, in accordance with data cited by Reuters. Tesla didn’t instantly reply to CNBC’s request for remark.

Canada can even launch a overview on different industries crucial to the nation reminiscent of batteries, semiconductors and photo voltaic merchandise.

– CNBC’s Sonia Heng contributed to this report.