Canada will impose a 100% import tax on electric cars from China starting in October. The country is following in the footsteps of the United States and the European Union, which have previously increased the level of duties. The tax also applies to American carmaker Tesla, which produces cars not only in the United States and Germany, but also in Shanghai.

In 2023, the number of electric cars imported from China to the Canadian coastal city of Vancouver was nearly five times what it was the year before. This happened after Tesla began shipping cars from its Shanghai factory to Canada. Previously, Tesla cars were exported to Canada from its California factory.

The US previously raised its import tax on Chinese-made cars to 100%. The EU increased the levy in July but has opted to apply different rates. Electric cars from some Chinese brands are taxed at around 40%, while Tesla’s are taxed at a lower 9%.

Prime Minister Trudeau told reporters he made the decision to address China’s policy of overproduction. According to the prime minister, China is “not playing by the same rules” and is trying to flood the Canadian market with electric vehicles.

The European Union, Canada and the United States want China to stop driving domestic industries out of the market. The European Commission believes that this competition is unfair, because the Chinese government will support this industry with unfair subsidies.

In addition to import duties on electric vehicles, Canada has announced it will increase duties on steel from China to 25 percent. The United States has also raised tariffs on other materials used in the production of electric vehicles. Canada is also considering such taxes on batteries and solar panels, for example.

A representative for the Canadian auto industry welcomed Trudeau’s decision, telling Reuters he thought it was a good decision. China has yet to respond to Canada’s announcement.