Canadian workers, the auto sector, the steel and aluminum industries, and related critical manufacturing supply chains are threatened by unfair competition from Chinese producers, who benefit from China’s intentional, state-directed policy of overcapacity and oversupply, as well as its lack of rigorous labour and environmental standards. That is why the federal government is taking further action to protect Canada’s workers and investments from China’s unfair trade policies.

“We are moving in lock-step with key international partners to protect Canadian workers and businesses in our steel and aluminum sectors from China’s intentional, state-directed policy of overcapacity and oversupply, which is undermining Canada’s ability to compete in domestic and global markets. Canada is taking decisive action to level the playing field and protect Canadian workers and investments in Canadian industry.” 

- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“China’s non-market policies and practices create an unfair playing field for businesses and undermine the success of Canadian workers. Our government will always defend our national interest and the best interests of Canadians.”

- The Honourable Mary Ng, Minister of Export Promotion, International Trade and Economic Development

“Canada has proud auto, steel and aluminum sectors, ones that have supported generations of workers, and built communities. As the world moves to reduce pollution and keep our air clean, we have attracted historic investments in building EV manufacturing capacity, and creating good-paying jobs, here in Canada. That is why our government is continuing to take concrete actions, to make sure we continue to strengthen our domestic supply chains and bolster access to critical commodities.” 

- The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry

 “Today, we are taking further action to protect Canadian workers from China’s unfair, non-market practices. This action, which represents yet another step in the right direction, will help foster the Canadian clean technology and electric vehicle supply chains—from mining critical minerals to manufacturing batteries and vehicles right here at home. As countries around the world increasingly look for a reliable supplier of these products, Canadian workers and businesses will be front and centre in seizing the economic opportunity this demand presents.”

- The Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources

• The 100 per cent tariff on Chinese EVs is in addition to the Most-Favoured Nation import tariff of 6.1 per cent that will continue to apply to EVs produced in China and imported into Canada.

• The Government of Canada has a net-zero economic plan that will invest over $160 billion, including an unprecedented suite of major economic investment tax credits, to grow the economy and create good-paying jobs for Canadians.

  • Public markets and private equity capital flows into Canada’s net-zero economy have grown in recent years, reaching $14 billion in 2023.

• Since 2020, China has emerged as the largest manufacturer and exporter of EVs in the world, and its capacity continues to grow, as a result of policies such as extensive state subsidies and other non-market practices. In 2023, China’s annual EV exports totalled $47.2 billion, up from $0.2 billion in 2018. 

  • China’s unfair trade practices include weak standards across EV supply chains, including poor labour standards, a lack of environmental protections, and trade policies supporting oversupply.

• Despite softening global demand, China has increased its steelmaking capacity by 18.6 million metric tonnes (more than Canada’s total production capacity) since 2018, making it the world’s largest steelmaker with over 1 billion metric tonnes produced in 2023, and similarly, China’s primary aluminum capacity has grown from 11 per cent of global production share to 59 per cent over the last two decades, with the government investing up to $70 billion between 2013-2017 alone, according to the OECD.

  • Key likeminded trading partners such as the United States and Mexico have identified similar concerns with Chinese policies and practices in the steel and aluminum sectors. Most notably, on May 14, 2024, the United States announced an increase in its Section 301 tariffs applicable to a range of products imported from China including steel and aluminum.

• Investments in manufacturing sectors critical to Canada’s future prosperity and the net-zero transition, such as batteries, semiconductors, solar, and critical minerals, are jeopardized by China’s non-market practices and weak standards across its supply chains. For example:

  • According to BloombergNEF, in 2023 China’s battery production was on its own sufficient to meet total global demand.
  • The International Energy Agency estimated that the Chinese government and Chinese firms have invested over US$50 billion in new solar production capacity since 2011, and it now accounts for over 80 per cent of manufacturing in all stages of solar panels globally.
  • China’s manufacturing capacity in semiconductors is expected to more than double in five to seven years, according to Barclays’ analysis of Chinese manufacturers’ development plans, leading to an anticipated oversupply in the market as early as 2026.
  • According to the International Energy Agency, China is the dominant producer and processor of critical minerals essential to the net-zero transition. China processes over half of all lithium, cobalt, graphite, and rare earth elements.

• Key likeminded trading partners have identified similar concerns with Chinese policies and practices in sectors critical in the net-zero transition, including the commitment from G7 Leaders in June 2024 to “acting together to promote economic resilience, confront non-market policies and practices that undermine the level playing field and our economic security, and strengthen our coordination to address global overcapacity challenges.” 

Associated links

• Backgrounder: Final list of steel and aluminum products from China that will be subject to a 25 per cent surtax
• Customs Notice 24-32 - China Surtax Order (2024)
• August 26, 2024: Canada implementing measures to protect Canadian workers and key economic sectors from unfair Chinese trade practices
• Consultations on potential surtaxes in response to unfair Chinese trade practices in critical manufacturing sectors

Media may contact:

Katherine Cuplinskas
Deputy Director of Communications
Office of the Deputy Prime Minister and Minister of Finance
Katherine.Cuplinskas@fin.gc.ca

Media Relations
Department of Finance Canada
mediare@fin.gc.ca
613-369-4000

General enquiries:

Phone: 1-833-712-2292
TTY: 613-369-3230
E-mail: financepublic-financepublique@fin.gc.ca

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