Workers work on the assembly line at a factory of vehicle manufacturer BYD Auto in Xi'an, Northwest China's Shaanxi Province, February 25, 2020. File Photo: Xinhua

The Canadian government's reported intention to replicate the US decision to impose tariffs on Chinese electric vehicle (EV) imports could hinder its green transformation, undermine market confidence among Chinese investors and worsen bilateral relations that have already been damaged by unfriendly policies toward China, Chinese experts said.

The government of Canadian Prime Minister Justin Trudeau is preparing potential new tariffs on Chinese-made EVs to align Canada with actions taken by the US and EU, Bloomberg reported on Friday, citing people familiar with the matter.

The government still has to make final decisions on how to proceed, but it's likely to announce soon the start of public consultations on tariffs that would hit Chinese exports of EVs into Canada, according to officials who spoke on condition of anonymity.

Chinese experts said that if the report is true, the Canadian government's decision is very unwise. By aligning closely with the US and risking its green transformation, Canada would also jeopardize foreign market confidence and place further strain on bilateral relations, they said.

Canada's reported stance may have been influenced by the US, but it would still be imprudent. For Canada, which lacks the domestic capability to develop new-energy vehicles, this move risks directly harming consumer interests and undermining Canada's ability to fulfill its climate commitments, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.

Moreover, Chinese enterprises are likely to approach the Canadian market with increased caution, potentially complicating efforts to revive economic and trade relations between the two countries, Zhou said.

Canada's reported actions reflect the pressure exerted by the US on its allies to take a tougher stance against China, Song Guoyou, deputy director of the Center for American Studies, Fudan University, told the Global Times on Friday.

The impact on China would be limited, because Canada is not a primary destination for China's EV exports, experts said.

"However, such a move will seriously undermine market economic principles by substituting political alliances for trade rules, which is highly inappropriate," Song noted.

"This is destined to further strain China-Canada relations, leading China to view Canada not as a reliable trade partner, but as a country that prioritizes so-called ally relations in trade," Song said, warning that consequently, it will pose challenges to bilateral political trust and risk disrupting normal economic and trade exchanges.

Following the footsteps of the US, the European Commission recently announced its decision to impose additional tariffs on Chinese EVs. This unilateral move has sparked widespread opposition and concerns in the international community. Many prominent industry players and politicians within the bloc opposed this decision due to its clear impact on the region's industrial development and green transformation, as well as the risk of triggering a trade war.

Global Times