Ottawa’s consultation for tariffs on Chinese EVs ends. What comes next?

In June, Finance Minister Chrystia Freeland told reporters that the federal government was concerned by “unfair” Chinese trade practices in the electric vehicle manufacturing sector. Freeland announced the start of a consultation process, which ends on Thursday.

While it is unclear when the results of the consultation will be made public, some experts say one outcome is most likely: increased tariffs on Chinese-made electric vehicles.

The consultation began on July 2 and is scheduled to end Thursday. While tariffs and a surtax on Chinese-made EVs are likely to be the focus after the U.S. imposed tariffs on the vehicles, Freeland said they are considering a range of policy options.

“The potential policy actions we are consulting on include a surtax on imports of Chinese EVs under Section 53 of the Customs Tariff Act, changes to which cars are eligible for the existing federal incentives for Zero Emissions Vehicle Program, and potentially broader investment restrictions in Canada,” Freeland said at the time.

Freeland said the measures were necessary because of what she termed unfair trade practices.

The announcement followed U.S. President Joe Biden’s announcement in mid-May that he was hiking tariffs on Chinese EVs from 25 per cent to 100 per cent this year, though there is only one Chinese EV currently available in the U.S.

Erik Johnson, senior economist at BMO Capital Markets, told Global News that he was looking for two major announcements in the coming days.

The first is an added surtax on Chinese-made EVs imported into Canada, at least on par with the European Union. This would raise tariffs on Chinese EVs from six per cent to 50 per cent.

He said he would also look out for restrictions to which vehicles are eligible for the