Canada to impose 100% tariffs on Chinese electric vehicles due to unfair competition.

• On Monday, Canada announced that it would impose 100% import tariffs on electric vehicles made in China, as well as a 25% tariff on steel and aluminum imports from China.
• Canada's EV, steel, and aluminum industries are facing "unfair" competition from China, and the new measures aim to "balance the playing field for Canadian workers."

On Monday, Canada announced that it would impose 100% import tariffs on electric vehicles made in China, in response to the actions of the U.S. and the European Union in imposing taxes due to concerns about unfair subsidies.

From October 1st, Canada will impose a 100% tariff on EVs manufactured in China and imported into Canada, in addition to the current 6.1% tariff.

Effective Oct. 15, Canada will impose a 25% tariff on steel and aluminum imports from China, making it the third-largest country for steel imports into Canada, according to the Canadian Steel Producers Association.

The steel and aluminum industries in Canada are facing "unfair competition" and trade practices from China, according to the government's finance department. Similar allegations have been made by the U.S. and EU, who claim China's "overcapacity" is the cause. China, however, has dismissed these claims as "groundless."

Canada's new measures aim to give Canadian workers a fair advantage and enable domestic and international competition for EV, steel, and aluminum producers.

The review of these steps will occur one year after their implementation, and they may be modified or supplemented with additional measures.

In May, the Biden Administration imposed a 100% tariff on Chinese electric vehicles (EVs), while the EU followed suit in July by increasing tariffs on China-made EVs. However, the EU later reduced some of the planned tariffs on China-made Tesla EVs, as well as other Chinese EV manufacturers, last week.

On Tuesday, Aletheia Capital's China strategist, Vincent Chan, stated on CNBC's "Street Signs Asia" that although Canadian tariffs may hinder China's EV growth momentum, they will not completely eliminate it.

On Monday, the Chinese Embassy in Canada stated that China strongly opposes the move and is resolute in its opposition. The move violates WTO rules and will harm trade and economic cooperation between China and Canada. The embassy added that China will take the necessary steps to safeguard its businesses.

The spokesperson stated that China's EV industry has experienced rapid growth due to continuous technological advancements, well-established industrial and supply chains, and intense market competition. Furthermore, the industry does not rely solely on government subsidies.

In June 2019, BYD, a Chinese EV maker, launched its first bus assembly plant in Canada and introduced electric buses in Toronto. Despite this, Chinese brands have not yet gained significant market share in the country, according to a report by Chinese state media Global Times in June.

In 2023, the number of automobile imports from China to Canada's largest port in Vancouver increased by 460% year over year to 44,356, coinciding with Tesla's commencement of shipping electric vehicles manufactured at its Shanghai factory to Canada. Tesla did not respond to CNBC's request for comment.

Additionally, Canada will conduct a review of other essential industries, including batteries, semiconductors, and solar products.

– CNBC's Sonia Heng contributed to this report.