Canada is “reviewing” its current 100% tariff on Chinese EVs, which could potentially give another entry point for the inexpensive, advanced vehicles into the North American market.
The strange part? The review is being pushed for, mainly, by the premiers of right-leaning provinces. And it has everything to do with your cooking oil.
The news of the review came yesterday from the National Post, who confirmed with Canada’s national finance minister that “officials are currently undertaking work on this review, including an assessment of China’s policies and trade practices, and whether the scope of the surtaxes, as well as the surtax rate, remain appropriate.”
Canada currently has a 100% tariff (surtax) on Chinese EVs and a 25% tariff on Chinese steel and aluminum, implemented last October. Canada’s tariffs came after similar tariffs implemented by US President Biden, though they were justified by claiming that China engages in unfair competition in EVs.
The country does have a significant auto industry, with about 10% of Canada’s exports consisting of cars, trucks and the parts and accessories for each. This auto industry is heavily tied with the US auto industry, which is centered in Detroit, a literal stone’s throw away from the Canadian border.
As a result, Canada followed the US’ lead with tariffs, recognizing that our two countries, historically tied together by the close trade and cultural relationships across the longest border on Earth should be on the same page about an industry that is shared and important to each of us (nevermind that the US tariffs were dumb to begin with).
A souring US-Canada relationship
But since then, things have changed. A contentious election in the US led to the dumbest person on the planet squatting in an office that he is Constitutionally barred from holding, and after that election the ignoramus in question illegally imposed even dumber tariffs on China and the rest of the world.
The same ignoramus also made numerous threats against Canada’s sovereignty and targeted the country with tariffs despite the close relationship between the US and Canada.
This caused disruption in Canada’s auto industry, including immediate job losses and a scramble to beg for exemptions for the industry that has long-benefitted from free cross-border movement of supplies. (Canadian Prime Minister Mark Carney today cited US tariffs as his reason for delaying Canada’s EV transition, showing how the actions of US republicans aren’t just poisoning Americans, but Canadians as well.
All told, all of this nonsense had the primary effect of swinging a sure-bet election for Canada’s right-wing into a solid win for the incumbent Liberal party.
And it has left Canadians thinking more about their own national identity, and searching to establish some independence from the United States of America’s whims on the International stage.
It’s all about cooking oil
With the US-Canada relationship already soured, China struck a characteristically surgical blow. In response to Canada’s tariffs on EVs, China announced it would impose heavy tariffs of 76% on… canola. Yes, the thing that’s in your cooking oil.
Canada is the world’s top producer of canola, ahead of China. And China is the world’s top consumer of canola (though US is Canada’s largest buyer of canola). So, China’s move removes a big market for Canadian farmers and disrupts the global canola market significantly. It’s estimated this has cost Western Canadian farmers nearly a billion dollars already (China did a similar move in 2018 with a soybean tariff on the US).
Now here’s the rub: Western Canada is the more rural part of the country, with giant plains provinces like Saskatchewan and Alberta whose primary industries are farming and oil. That’s where the canola is grown. These provinces, predictably, are pretty conservative. And they’re mad about these tariffs.
Canada’s right-wing leads charge for Chinese EVs
And so, the right-wing premiers of both Saskatchewan and Alberta have recently demanded that the Canadian government remove tariffs on Chinese EVs, in the hope that it would get China to remove the tariffs that are currently ruining Canada’s canola farmers. Saskatchewan’s premier is even heading to China right now to negotiate.
From the US, this seems counterintuitive – why would the right-wing be asking for more EVs, when the right wing in the US is so stupidly against improving our transportation options.
And it even seems counterintuitive from the Canadian perspective, as the provinces of Alberta and Saskatchewan both have ridiculous registration taxes for electric cars, where EVs suffer high opposition due to the prominence of the oil industry in the each of them. Alberta, in particular, is often referred to as the “Texas of Canada,” and has a brewing separatist movement, some members of which want Alberta to join the USA. So how’s that for an inversion of expectations.
But as a result of the US’ haphazard tariff nonsense, its own allies in Canada (even specifically those in the Canadian right wing) have been pushed towards a deeper relationship with China, with Canadian PM Carney stating this week “there may be areas where… we can expand the commercial relationship with things that China does well.”
And the charge by right-wing premiers seems to be working. After yesterday’s announcement of the Canadian federal government’s “review” of Chinese EV tariffs, and the impending trip to China by Canadian trade officials and Saskatchewan Premier Scott Moe, China delayed the imposition of canola tariffs just today.
So, Canadian farmers get some breathing room – and depending on the results of the tariff “review,” if they end up getting access to cheap Chinese EVs, they might breathe more freely in more ways than one.
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