An aerial view of Volkswagen cars to be loaded onto a ship at a port in Nanjing, in eastern China's Jiangsu province, on June 23.STR/AFP/Getty Images
Politicians keep telling us that global warming is the greatest threat Canada faces. But it turns out there is one threat even greater: cheap Chinese imports.
On Monday, as expected, the Liberal government slapped an additional 100-per-cent tariff on Chinese electric vehicles entering Canada. This country is matching a similar tariff imposed in May by the United States. The European Union is also raising tariffs on Chinese EVs, though not by as much as the North Americans.
Monday’s announcement was like so many in the past. Liberal cabinet ministers proudly declared 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 corner the North American EV market by dumping subsidized vehicles into it,” Finance Minister Chrystia Freeland told reporters. “China has an intentional, state-directed policy of overcapacity and oversupply designed to cripple our own industry.
“… We simply will not allow that to happen to our EV sector.”
Those long of tooth may remember politicians issuing similar protests in the 1970s and 1980s over Japanese and Korean auto exports. The perfidious Asians are 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.
Eventually, the North American and Asian auto industries found a way to live with each other, in part by convincing Toyota, Hyundai et al to build plants on this continent. The situation with Chinese EVs is different.
While Japanese exports were once seen as a major threat to the American economy, Japan was never a strategic threat.
China, on the other hand, clearly seeks both economic and strategic global influence. Letting the Chinese dominate the North American and European EV market would reward an aggressive autocracy that doesn’t play by the global-trading rules.
As well, elements of the Chinese EV industry employ forced labour by Uyghurs in the Xinjiang region. Accepting Chinese exports that employ such labour rewards that vile practice. That is why the Americans have strong – and Canada, weak – laws banning the import of products employing forced labour from the Xinjiang region.
Finally, accepting cheap Chinese EVs would undermine the more than $50-billion that federal and provincial governments have invested in developing Canada’s EV auto sector, with the aim of ensuring a fully integrated North American EV market.
These are all good reasons to accept the need for such punitive tariffs. But let’s not also forget what we’re losing by imposing them.
There are few EVs available in Canada, and they are quite expensive, compared with their internal-combustion counterparts. The Chinese, in contrast, have an EV hatchback in their market that sells for the equivalent of $14,000. Even if the price doubled to meet Canadian environmental and safety standards, Chinese EVs would be more affordable than anything made here. That’s why “China has become an electric vehicle export behemoth,” according to the Atlantic Council.
But it will not soon be a behemoth in the United States and Canada, 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 that GM, Ford and Chrysler survived competition from the Japanese and Koreans was by learning to make better, cheaper cars. Keeping the Chinese out of the Canadian EV market will reward uncompetitive practices within the industry.
As well, we can expect the Chinese to retaliate, probably in the area of agriculture exports.
If the very highest priority is to lower carbon emissions, then Chinese environmental and labour standards could be negotiated as part of an EV-import agreement. The real truth is that fighting global warming isn’t as important for the federal government as staying onside with the Americans.
That alone is reason enough. But the next time a politician tells you that we must do everything in our power to combat global warming, ask them why they won’t let you buy a cheap Chinese EV.