HALIFAX—A top adviser to U.S. President Joe Biden urged Canada to consider heavily subsidized Chinese electric vehicles as not just an economic threat but as a security concern, and urged a united tariff front against cheap imports flooding the market.
White House National Security Advisor Jake Sullivan spoke to reporters Sunday evening in Nova Scotia, where he met with Prime Minister Justin Trudeau and his cabinet — in a surprise visit to the Liberal retreat — and ahead of a high-level visit Sullivan will make this week to Beijing.
“Canada will make its own determinations, but the U.S. does believe that a united front, a co-ordinated approach on these issues benefits all of us,” Sulllivan said.
Sullivan’s remarks come as sources told the Star the Liberal government is expected to announce this week, possibly as early as Monday, its long-delayed decision on whether to match the Americans in imposing import tariffs on Chinese electric vehicles after months of weighing the impact and potential fallout.
Biden’s adviser stopped short of calling on Canada to match U.S. tariffs that were hiked last May, but he noted that the EU has acted, and the G7 has made strong statements in support of the U.S. view.
Sullivan said the U.S. sees “two distinct challenges” connected with Chinese EVs: “Massive subsidies going into the Chinese electric vehicle industry have eliminated a level playing field, and so part of the economic response the U.S. has taken is responding to that.”
“And then there are issues associated with data security, with critical infrastructure, and with the underlying questions of national security associated with connected vehicles, electric vehicles,” he said.
Sullivan said he would share the U.S. view with the Trudeau cabinet “behind closed doors,” but said “it’s not for the for the U.S. to try to dictate” policy choices.
In May, the Biden administration quadrupled American tariffs on Chinese-made EVs to 100 per cent, blaming unfair Chinese government subsidies to Chinese automakers. Biden also hiked tariffs on other products including solar cells, computer chips, medical equipment and lithium batteries, and the administration encouraged Canada to follow suit. The EU has also slapped higher tariffs on cheap Chinese EV imports.
Sullivan heads to Beijing this week to meet with China’s foreign affairs minister Wang Yi, one of a series of high-level meetings that the White House said is key to managing an “intensely competitive relationship” and keep it from “veering into conflict.”
Earlier in the summer the Liberal government wrapped up a 30-day public consultation on potential EV tariffs, but has not yet revealed its plan.
However, many observers expect it to match the U.S. penalties, especially after Deputy Prime Minister Chrystia Freeland said in June that Canada would not become “a dumping ground” for cheap, mass-produced Chinese EVs that are flooding global markets.
Conservative leader Pierre Poilievre has called on Ottawa to match the U.S. action.
On Aug. 9, the Liberal government launched a broader economic security consultation on supply chain disruptions, rising protectionism and unfair trade practices — which one government source acknowledged is clearly aimed at determining how Canada should confront China on a range of issues which are core to Canadian national security concerns.
Sullivan met with Prime Minister Justin Trudeau here Sunday and later briefed cabinet ministers at a dinner that kicked off the two-and-a-half day retreat focused mainly on domestic economic issues, although Canada-U.S. relations are on the agenda for the last day.
Answering a handful of Canadian media questions before his meeting, Sullivan said he welcomed the chance to speak to the prime minister and his governing team, saying they shared “a common vision for what the world should look like and can look like if like-minded countries work together for peace, stability and progress.”
He hailed the strength of the U.S.-Canada bilateral relationship on a range of national security priorities, including the climate crisis, Ukraine, and he said the U.S. welcomed Canada’s commitment to increase its defence spending budget to 2 per cent of GDP by the end of 2032.
Asked if he wanted that increased faster, Sullivan said Canada had taken a “historic step … and then, of course, with all countries, we’d like to see that 2-per-cent target get hit as soon as is humanly possible.”
This week’s cabinet meetings will see the Liberals looking at ways to advance their priorities for the fall and the months ahead, particularly housing and economic supports for the middle class, as well as examining how to shore up political support in Atlantic Canada.
Ministers will hear briefings by economic and housing policy experts, current and former mayors, along with the current and former Canadian ambassadors in Washington.
Earlier Sunday, Housing Minister Sean Fraser and Public Works Minister Jean-Yves Duclos released details of a plan to free up federal lands and buildings for private sector housing developments as the government puts a big push on trying to implement many of its promises in the final year before an election is expected.
The Conservatives are pressing hard on the Liberals’ failure to deliver on promises, and in a statement Sunday housing critic Scott Aitchison dismissed the announcement, saying, “By their own admission, it will take years more to actually build anything on these proposed federal communes.”
