American EV giant Tesla Inc. TSLA reportedly requested the Canadian government for a tariff reduction on its vehicles before it imposed a 100% tariff on China-made EVs this week.
What Happened: The Canadian government announced on Monday that it would levy 100% tariffs on all EVs manufactured in China and sold in the country, effective Oct. 1. The tariffs also apply to EVs made by Tesla.
Tesla approached Canada before the announcement and asked for a tariff rate similar to what it received in the European Union, Reuters reported, citing a government source familiar with the matter. However, the company has not contacted Ottawa since the announcement on Monday, they added.
The European Union said earlier this month that it will impose only 9% tariffs on EVs made by Tesla in China while other Chinese EV makers are faced with as much as 36.3% rates.
The office of Canada’s Finance Minister declined to address talks with Tesla, Reuters said.
Tesla did not immediately respond to Benzinga’s request for comment.
Why It Matters: Canada’s new tariff proposal follows the U.S. government’s announcement in May that it will quadruple tariffs on Chinese EV imports to 100%. Tesla, however, doesn’t import China-made EVs to the U.S. and the tariffs are yet to be implemented.
The Chinese Embassy in Canada strongly objected to the new tariff decision, labeling it as trade protectionism and political dominance, and warned that it would negatively impact economic cooperation between the two nations and hinder Canada’s green transformation efforts.
Canada PM Justin Trudeau said earlier this week that the tariffs are aimed at countering China’s intentional, state-directed policy of over-capacity.
The Chinese Embassy in Canada, however, rejected Canada's claims of overcapacity in China's electric vehicle industry, describing them as "groundless."
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Photo courtesy: Tesla
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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