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Premier Wab Kinew recently sent a letter to Prime Minister Mark Carney requesting a revision of the 100 per cent tariffs on Chinese EVs, primarily to mitigate ongoing damage to Manitoba’s canola industry.
China has retaliated to the EV tariffs in a way that hits Manitoba hard: punishing tariffs on canola seed and oil.
If Kinew is looking for a way to have his canola and eat it, too, here it is.
Argue for a tariff structure on Chinese EVs that mirrors the approach in the European Union, with a smattering of Canada’s current tariff policies thrown in.
A BYD dealership in the U.K.: Chinese EVs are considerably less expensive and, in some ways, technologically superior to what’s available now. (Chris Ratcliffe / Bloomberg)
The EU, instead of blanket 100 per cent tariffs on all Chinese EVs, sets the tariff rate based on the level of government subsidy Chinese automakers receive, so BYD is tariffed 17 per cent while SAIC is tariffed 33 per cent.
Chinese carmakers received between US$250 million and US$500 billion in subsidies over 10 years, according to the Centre for Strategic and International Studies.
Such a scheme would pressure Chinese EV prices enough to not hollow out what remains of Canadian automotive manufacturing, but leave enough pressure on the market that Ford, GM and Stellantis, which have all reduced Canadian manufacturing, to restart their shuttered assembly lines.
The Detroit Three — Ford, GM and Stellantis — receive tariff remission based on manufacturing in Canada: more manufacturing, more tariff remission.
They’ve already invested the billions in their Canadian plants, plus it’s a way to ensure the federal government doesn’t sue them into oblivion for potentially reneging on agreements that rendered billions in taxpayer support.
It would also remove, or at least ameliorate, the reductions in tariff remission the Carney government imposed as retaliation for moving Jeep Compass production to Ohio and for GM’s decision to shutter its Ingersoll, Ont. plant that had been producing the Brightdrop EV delivery vans.
Where Kinew’s efforts could become very interesting is here: encourage the Chinese to receive their own tariff remission by investing in Manitoba manufacturing.
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For the longest time, it was believed Canada’s auto manufacturing sector was limited to the Oshawa-Detroit corridor due to proximity to transportation.
But as Kia and Hyundai plants in remote Georgia and Alabama towns and as a growing manufacturing hub in Tennessee show, auto plants don’t need to be congregated in southern Ontario and Michigan.
With plants in Zhengzhou and further inland at Xi’An, BYD is no stranger to remotely located facilities.
Further, its location in the Zhengzhou Airport Economic Zone shows it is familiar with the concept behind Centreport, Manitoba’s nascent equivalent.
An automotive assembly plant is a massive project, but as Manitoba has proven — with Boeing, in particular — our workforce is well-suited to creating at least components. Plus, ongoing exploration for Manitoba critical minerals could also prove enticing.
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