Canada is contemplating the introduction of import tariffs on electric vehicles produced in China and will solicit public feedback on the proposal, announced Deputy Prime Minister Chrystia Freeland.

On Monday, Freeland pointed out that the nation's automotive sector is experiencing unfair competition due to China's "state-driven policy of overcapacity." Consequently, Ottawa will initiate a 30-day public consultation starting from July 2 to determine Canada's response.

"Chinese manufacturers are purposely creating a global oversupply, which adversely affects EV producers across the globe, including those in Canada," Freeland remarked in Vaughan, Ontario, aligning with sentiments from the United States and the European Union.

Freeland added that public consultations would guide the government in crafting its policy response, potentially involving import tariffs, and noted that this move would synchronize Canadian policy with that of allies in Washington and Brussels.

Last month, President Joe Biden of the United States introduced substantial tariff hikes on various Chinese imports, including electric vehicles. Meanwhile, the European Commission, responsible for trade policy across its 27 member nations, plans to levy additional duties up to 38.1 percent on Chinese producers such as BYD, Geely, SAIC, and on Chinese-manufactured Tesla and BMW vehicles.

China has refuted claims of unfair subsidies and overcapacity issues, arguing that its EV industry's growth stems from technological, market, and supply chain advantages.

A commentary in the Chinese state-supported Global Times urged "Canada to act strategically" and not to "jeopardize normal economic exchanges with China for Washington's strategic gains."

The article further cautioned that Canadian tariffs on Chinese EVs "may erode market confidence among Chinese investors, exacerbate bilateral tensions, and obstruct regular economic and trade cooperation," a Global Times journalist noted in the opinion piece.

Prime Minister Justin Trudeau’s Liberal government, aiming to place Canada at a vital point in the global EV supply chain, faces domestic pressure to address the issue of Chinese EV imports.

Last week, the premier of Ontario, the country’s most populous province and a key automotive hub, called on Ottawa to enact tariffs of at least 100 percent on Chinese electric vehicles to safeguard employment.

Freeland withheld details on the exact nature of any potential actions by Ottawa or whether EV components, such as batteries, might be affected, emphasizing that all options are under consideration.

“We aren't excluding any possibilities,” she stated, underscoring that “our most robust trade tools are in play.”

Canada has secured multi-billion-dollar agreements to attract companies engaged in all facets of the EV supply chain, aiming to reinforce its manufacturing stronghold in Ontario.