Accusing China – one of the world’s largest exporters of electric vehicles (EVs) – of “not playing by the same rules as other countries” in areas such as environmental and labour standards, he also unveiled a 25% surtax on imports of steel and aluminium products from China.

The US and the European Union in recent months imposed tariffs on Chinese EVs of 100% and 38%, respectively.

Canada’s auto manufacturing industry employs over 125,000 people, and Ottawa has poured billions of dollars into supporting its transition to electric vehicles, and firming up a domestic electric battery supply chain.

Its strategy – which has enticed Goodyear Tire, Honda, Stellantis, Volkswagen and others with subsidies – follows that of the neighbouring US, whose Inflation Reduction Act has provided a host of incentives for the green industry.

Ottawa has also blocked new Chinese investment in its critical minerals mining sector.

At a news conference in Halifax on Canada’s Atlantic coast, Trudeau said Chinese EV overproduction and hefty state subsidies for its auto sector “requires us to take action”.

“Unless we want to get in a race to the bottom, we have to stand up, and that’s what we’re doing,” he said.

In a statement, the government called the tariffs a response to “this extraordinary threat”.

The EV surtax, on top of existing import duties of 6.1%, will be imposed starting Oct 1 on Chinese electric and certain hybrid passenger automobiles, trucks, buses and delivery vans.

As well, Ottawa will limit eligibility for EV incentives to those made in countries with which Canada has free trade deals, which would exclude China.

Its surtax on imports of steel and aluminium products from China will be effective Oct 15.