electra-supply.comOn October 18, the Canadian government announced a new program allowing Canadian businesses to apply for exemptions on tariffs imposed on imports from China, including electric vehicles and steel and aluminum products.
The government plans to make these exemptions available for additional taxes levied on key manufacturing products imported from China. According to a recent statement from Canada’s Ministry of Finance, this initiative comes in response to potential challenges that Canadian industries may face in adjusting their supply chains in a timely manner. The government aims to ensure that Canadian workers and businesses do not bear “unnecessary burdens” due to the tariffs on Chinese products.
The reduction of these additional taxes will only be applicable under “compelling” circumstances, as outlined by the officials. Valid scenarios for tariff exemptions may include: situations where input goods or alternatives cannot be sourced domestically, or reasonable alternatives outside of China are unavailable; existing contractual obligations prior to August 26 that require Canadian companies to procure Chinese inputs for their products or projects within a specified timeframe; and other special circumstances that could cause “significant adverse effects” on the Canadian economy.
It’s important to note that goods intended for resale in the U.S. under the same conditions will not qualify for tariff exemptions. The government will also consider appropriate exemption periods and will generally provide transitional relief based on the circumstances of supply chain adjustments.
As previously reported, Canada officially implemented a 100% additional tariff on electric vehicles imported from China on October 1, and plans to impose a 25% additional tariff on certain steel and aluminum products from China starting October 22.
From September 10 to October 10, the Canadian government conducted public consultations regarding additional tariffs on certain “key manufacturing” products from China, focusing on items like batteries and battery components, semiconductors, solar panels, and critical minerals.
Recently, various business groups and individuals in Canada have expressed concerns that these tariffs may hinder market dynamics and create unnecessary obstacles.
China has repeatedly expressed strong dissatisfaction and opposition to Canada’s tariff measures, arguing that they violate principles of market economy and fair competition, seriously damaging normal economic and trade cooperation between the two countries. This has led to significant disruptions and distortions within the global supply chain. In response, China has initiated a lawsuit against Canada’s unilateral and protectionist measures at the World Trade Organization and has launched an anti-discrimination investigation concerning Canada’s restrictive actions.
