As Poilievre and industry call for Chinese EV tariff package, Liberals say stay tuned

Conservative Leader Pierre Poilievre is calling on the federal government to slap tariffs on Chinese electric vehicles, steel, aluminum, critical minerals and other products, backing calls from industry for Canada to act in alignment with its allies.

China, through massive subsidies and exploiting weak environmental and labour standards, are producing "artificially cheap steel, aluminum and EVs," Poilievre said.

"They're doing this with the goal of crushing our steel, our aluminum, and our automotive production, and taking our jobs away," the Conservative leader said, behind a "bring home our jobs" placard and in front of Stelco steel workers in Hamilton, Ont. on Friday.

• Top headlines on Canadian politics, all in one place

Poilievre is calling for Prime Minister Justin Trudeau to effectively match the tariff package proposed by this country's largest trading partner, the United States. Under his proposal, Canada would introduce:

• A 100 per cent tariff on made-in China EVs;
• A 50 per cent tariff on semiconductors and solar cells;
• A 25 per cent tariff on steel and aluminum products as well as other critical minerals and EV batteries; and
• Block any rebates for Chinese EVs.

"Trudeau has failed to protect our workers," Poilievre said.

Responding to the Conservative proposal, Finance Minister Chrystia Freeland's office called it "incredibly rich" for Poilievre to come to the defence of Canadian auto workers "months late," noting his party tried to delay the implementation of auto sector investment tax credits.

"The Deputy Prime Minister has been clear that action is necessary – such as a surtax under Section 53 of the Customs Tariff – to counter China’s intentional, state-directed policy of overcapacity," said Freeland's deputy communications director Katherine Cuplinskas.

"As the true defender of Canadian workers and industries, including of the auto manufacturing, steel, and aluminum sectors, our government will have more to say soon."

Industry leaders want swift action

The proposal echoes calls made in Ottawa on Thursday by leaders in Canada's steel and aluminum industries, who urged the federal government to quickly impose a new tariff package targeting Chinese goods.

The United States and Mexico have already advanced trade action against China, and there are concerns that if the federal government doesn't follow suit, Canada could become a dumping ground for those imports.

In doing so, the government also risks running afoul of the key North American trade pact known in this country as the Canada-United States-Mexico Agreement (CUSMA), the stakeholders warned.

"In an ideal world, you would walk in lockstep… So that we don't open up a hole in the CUSMA fortress that will enable Chinese imports to come in," CEO of the Aluminium Association of Canada Jean Simard said during a press conference on Parliament Hill.

"We think that the period of the coming weeks is crucial for Canada to take a stand on this."

Canada launched a 30-day consultation period in July, but the federal government has yet to reveal how it plans to combat the excess supply of Chinese-made goods flooding the market.

For an industry that says it has been feeling the "devastating effects" of Chinese overcapacity for a decade, inaction is not an option.

"Failure to act risks good jobs in steel and aluminum communities right across this country," said Canadian Steel Producers Association President Catherine Cobden.

"We think it's imperative that the government meet the moment and keep our CUSMA partnership whole, as well as protect our domestic steel and aluminum industries by taking an aligned approach."

Risking a trade war?

Freeland's office said the government agrees more needs to be done to level the playing field and prevent trade diversion as a result of other countries’ actions.

"All options are on the table to ensure Canadian workers and EV supply chains are protected from unfair competition," Cuplinskas said.

Now that the short consultation window has closed, Canada has no choice but to quickly move in lockstep with its allies on tariffs, or face finding itself on the wrong side of a trade war, said NorthStar Public Affairs Partner Adam Taylor. 

"If we don't have tariffs, then things can come into our country, and then they could potentially go into the United States and circumvent their own tariff regime," he said.

"We have to be very careful,” said Taylor, who is a former senior trade and economic adviser to the previous Conservative government.

"We're talking about North America as almost a single market and therefore we have to have alignment on policy, and that includes on tariff policy," he explained.

China has indicated it would respond to any coming trade action, something Canadian officials are likely taking into consideration as they plot the country's next move.