04:35 PM EDT, 06/24/2024 (MT Newswires) -- Starting July 2, noted Erik Johnson over at BMO Economics, Canada will launch a 30-day consultation period to consider the imposition of surtaxes on electric vehicles (EV) made in China alongside potential changes to eligibility rules for the iZEV rebate program and broader investment restrictions. He noted Minister Freeland cited China's "intentional, state-directed policy of overcapacity" as one of the catalysts behind today's decision.

According to Johnson, EVs from China have "gone from a rounding error to comprising over 20% of the Canadian market in the span of two years" -- though, he said, that is entirely driven by Tesla imports as opposed to domestic Chinese brands.

Later this summer, Canada could see additional tariffs placed on Chinese-made EVs at least on par with those levied in the E.U. and the current EV rebates will likely no longer be available for vehicles assembled in China.

Bloomberg News earlier Monday said Canada Prime Minister Justin Trudeau's government was seeking to align itself with the Biden administration on trade.