Canada is projecting an annual revenue of about C$100 million ($71.4 million) from new tariffs on Chinese steel, aluminum and electric vehicles, parliamentary budget officer Yves Giroux said, Bloomberg reports.
Finance Minister Chrystia Freeland announced the tariffs in August of this year, and they came into effect in October. She explained the decision by saying that China was deliberately flooding the market with products, driving down prices and harming Canadian industry. The tariffs include 100% on Chinese electric vehicles and 25% on steel and aluminum, which is in line with the actions of US President Joe Biden introduced earlier this year.
Despite the additional revenue, Giroux notes that electric vehicles could be a source of revenue loss. Mostly imported from China, electric cars such as Tesla’s from the Shanghai factory are likely to be sourced from other factories, particularly in the United States, to avoid tariffs. This means that Canada will lose revenue from its existing 6.1% duty on these cars, estimated at more than C$100 million annually.
As for steel and aluminum, Giroux predicts a decrease in demand for Chinese products by almost 50% due to higher prices. However, even under these conditions, the tariff will generate more than CAD 200 million in revenue per year.
In general, the impact of these measures on the Canadian economy will be negligible. The production of metals and utilities in the country will increase, but costs for the construction and manufacturing sectors will also rise due to higher raw material costs.
The issue of possible retaliatory trade measures by China remains open, as well as the risks from the potential policy of the new US President Donald Trump, who threatens to impose a 25% tariff on all Canadian goods.
As GMK Center reported earlier, Canadian steelmakers support the imposition of duties on Chinese steel imports. According to the declaration, the industry recognizes the efforts to implement a proactive approach to protect the sector from unfair trade practices and to coordinate measures with the country’s most important trading partner, the United States.
