Canada is weighing whether to slap tariffs on Chinese-made electric vehicles to stop cheap EVs from flooding the market. But Ottawa – which has pumped billions of dollars worth of subsidies into the Canadian EV industry – says its concerns are not only economic.
“We’re also looking at the national security aspect of this; the security aspect including cybersecurity, when it comes to Chinese exports of high technology items, like EVs,” Deputy Prime Minister Chrystia Freeland said Monday.
She made the remarks at an auto plant in Vaughan, Ont., north of Toronto, while announcing a 30-day consultation process on what she called Beijing’s “unfair trade practices.”
Canada is considering whether to follow the U.S.’s lead and increase tariffs on Chinese EVs from 25 per cent to 100 per cent.
The European Union is mulling similar measures but has agreed to hold trade talks with the Chinese government.
In addition to hiking levies, Washington also launched a security review last February to investigate Chinese-made smart cars.
“It doesn’t take a lot of imagination to figure out how a foreign adversary like China, with access to this sort of information at scale, could pose a serious risk to our national security and the privacy of U.S. citizens,” U.S. Commerce Secretary Gina Raimondo said at the time.
As China tries to position itself as a global leader in EVs, cybersecurity experts have warned Beijing could use these vehicles to collect huge amounts of sensitive data on North American drivers.
“These cars, particularly the ones that are equipped with self-driving capabilities or smart features, have microphones and cameras. They are rolling spy vans,” said David Shipley, the CEO of Beauceron Security, a New Brunswick-based cybersecurity firm.
What are other possible risks?
Shipley says massive data collection is one of several potential threats. He warns that EVs and other smart vehicles could also be manipulated by bad actors.
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“A modern electric car is more software than anything else. And because of that, there are always going to be concerns that could we end up in a hostile situation, more than we already are with China. Could they just turn the cars off remotely?” he said.
The former head of Britain’s MI6 spy agency, Richard Dearlove, recently expressed similar worries, warning the world should be “very concerned” by Chinese EVs.
“The car could be switched off by the manufacturer. How many cars would it take to block circulation of traffic in a major western city?” he said.
There are currently few Chinese-made vehicles sold in North America, but their sales are growing in Europe.
“I’m not saying this is an immediate threat to any car purchaser. But if you take a pragmatic look, a large number of Chinese cars in western cities, if we have a serious deterioration in relations with China, how is China going to exploit that asset built up over time?” Dearlove said.
The U.S. government says it’s looking at possible regulations governing the use of technology in vehicles from China and what it called other “countries of concern,” including Russia and Iran.
A spokesperson for China’s foreign ministry said the review “overstretches the concept of national security” and is discriminatory.
But Beijing has reportedly barred certain American EV brands like Tesla from Chinese government compounds over its own security concerns over what data the U.S. automaker can collect.
Have we been here before?
It’s not clear how much of Canada’s consultation process will focus on national security considerations. Freeland spoke only briefly about the potential cybersecurity risks during Monday’s news conference.
But Shipley says the discussion around Chinese-made EVs harkens back to the debate around Chinese tech giant Huawei.
The federal government banned the firm from expanding into Canada’s 5G wireless network in 2022 over similar concerns.
“This is the logical continuation of that exact same conversation,” Shipley said.
“Can we continue to trade in advanced goods that could have dual use purposes to them with China?”
— with files from The Associated Press and Reuters
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