An aerial view of Volkswagen cars being loaded onto a ship at a port in Nanjing, east China’s Jiangsu province, June 23.STR/AFP/Getty Images
Politicians keep telling us that global warming is the biggest threat to Canada. But there is an even bigger threat: cheap imports from China.
As expected, the Liberal government on Monday imposed an additional 100 percent tariff on Chinese electric vehicles entering Canada. Canada is following a similar tariff imposed by the United States in May. The European Union is also increasing tariffs on Chinese electric vehicles, but not as much as the North American ones.
Monday’s announcement was like so many in the past, with Liberal cabinet ministers proudly declaring that Canadian workers are the most competitive in the world, our auto sector is second to none, the future is bright, and so on and so forth.
Except for one problem. “The Chinese are trying to dominate the North American electric car market by dumping subsidized vehicles onto the market,” Finance Minister Chrystia Freeland told reporters. “China is pursuing a deliberate, state-led policy of overcapacity and oversupply aimed at crippling our own industry.”
“…We simply will not allow this to happen to our EV sector.”
Those who are still keeping track may remember politicians who staged similar protests against Japanese and Korean car exports in the 1970s and 1980s. The perfidious Asians were trying to take over the North American market, they warned. Something must be done!
In reality, the Japanese and Koreans simply built better and cheaper cars.
After all, the North American and Asian auto industries have found a way to live together, in part by convincing Toyota, Hyundai and others to build factories on that continent. The situation is different with Chinese electric vehicles.
Although Japanese exports were once considered a major threat to the American economy, Japan never posed a strategic threat.
China, on the other hand, is clearly seeking both economic and strategic global influence. Allowing the Chinese to dominate the North American and European electric car markets would be a reward for an aggressive autocracy that does not play by the rules of global trade.
In addition, parts of China’s electric vehicle industry employ forced labor from the Xinjiang region. Accepting Chinese exports that use such labor rewards this abhorrent practice. This is why the U.S. has strict – and Canada has weak – laws prohibiting the import of products from the Xinjiang region that used forced labor.
Finally, the acceptance of cheap Chinese electric vehicles would undermine the more than $50 billion that the Canadian federal and provincial governments have invested in developing Canada’s electric vehicle sector, with the goal of ensuring a fully integrated North American electric vehicle market.
These are all good reasons to recognise the need for such punitive tariffs. But we should also not forget what we lose by introducing them.
There are few electric cars available in Canada, and they are quite expensive compared to their internal combustion engine counterparts. The Chinese, on the other hand, have a small electric car on the market that costs the equivalent of $14,000. Even if the price doubled to meet Canadian environmental and safety standards, Chinese electric cars would be more affordable than anything made here. That’s why “China has become an electric car export giant,” according to the Atlantic Council.
But it won’t be a giant in the U.S. and Canada anytime soon, thanks to new tariffs. “Canada made a decision today that will result in fewer affordable electric vehicles for Canadians, less competition and more climate pollution,” Clean Energy Canada said in response to the announcement.
One way GM, Ford and Chrysler have been able to avoid competition from Japan and Korea is by learning to build better and cheaper cars. Keeping the Chinese out of Canada’s electric car market will reward anti-competitive practices within the industry.
In addition, retaliatory measures from the Chinese are to be expected, probably in the area of agricultural exports.
If cutting carbon emissions is a top priority, Chinese environmental and labor standards could be negotiated as part of a deal to import electric vehicles. The truth is that the federal government cares less about fighting global warming than it does about helping Americans.
That alone is reason enough. But the next time a politician tells you we need to do everything in our power to fight global warming, ask them why they don’t let you buy a cheap Chinese electric car.
