China Imposes New Tariffs on Canadian Goods Amid Trade Tensions
China has announced tariffs on Canadian agricultural products worth over $2.6 billion, retaliating against Canada’s earlier levies and initiating a new trade front influenced by U.S. policies. Scheduled to take effect on March 20, the tariffs include significant duties on rapeseed and aquatic products but exclude canola, indicating a potential for future negotiations as Canada’s elections approach.
On Saturday, China imposed tariffs on Canadian agricultural and food products valued at over $2.6 billion, retaliating against levies implemented by Canada in October. This escalation constitutes a new front in a trade conflict significantly influenced by tariffs initiated by U.S. President Donald Trump. Scheduled for enactment on March 20, the tariffs parallel the 100% and 25% import duties Canada imposed on Chinese electric vehicles and steel products four months prior.
By intentionally excluding canola, a major Canadian export that had previously been subject to an anti-dumping investigation, China may be signaling a willingness to engage in future trade discussions. Nevertheless, analysts view these tariffs as a cautionary measure, particularly as the Trump administration contemplates potential reductions of its 25% levies imposed on both Canada and Mexico if they introduce a similar 20% duty on Chinese goods.
The Chinese commerce ministry denounced Canada’s actions, stating, “Canada’s measures seriously violate World Trade Organization rules, constitute a typical act of protectionism and are discriminatory measures that severely harm China’s legitimate rights and interests.” China’s tariffs include a 100% duty on Canadian rapeseed oil, oil cakes, and peas, alongside a 25% duty on aquatic products and pork.
Analysts note, “The timing may serve as a warning shot,” suggesting that Canada must be mindful of the consequences of aligning closely with U.S. trade policy. With the China director at Eurasia Group remarking that Canada was a lower priority, it underscores China’s approach to managing multiple trade disputes with various countries simultaneously.
In response to the tariffs, Canadian Prime Minister Justin Trudeau explained that the levies aimed to counteract China’s state-directed policies contributing to over-capacity, mirroring similar actions by the United States and the European Union against Chinese electric vehicles. Following these developments, China had initiated an anti-dumping inquiry into Canadian canola imports, with over half of Canada’s canola exports directed to the Chinese market, totaling $3.7 billion in 2023.
Analyst Rosa Wang noted, “The investigation on Canadian canola is still ongoing” and the absence of canola from the current tariff list may indicate a tactical move to facilitate negotiations. Beijing might also be anticipating a shift in the Canadian government towards a more favorable stance with the impending national elections scheduled by October 20.
As Canada’s second-largest trading partner, China represents a significant portion of Canada’s exports, which amounted to $47 billion in 2024. Regarding the situation, agriculture analyst Even Pay remarked, “To be honest I don’t understand why they are doing this one at all,” expressing skepticism about the motivations behind the tariffs. It is anticipated that Beijing may seize the opportunity of a potential leadership change in Canada to adjust relations, reminiscent of their dealings with Australia after a governmental transition.
In summary, China’s recent imposition of tariffs on Canadian goods signifies an escalating trade conflict influenced by the wider context of U.S. trade policies. While the exclusion of canola from tariffs suggests a potential openness to negotiation, the retaliatory measures also serve as a warning to Canada about the risks of aligning too closely with the U.S. As Canada approaches a national election, future bilateral relations may hinge on the political changes within the Canadian government. China’s strategy appears focused on leveraging this international landscape to its advantage while navigating complex trade disputes.
Original Source: www.ndtv.com
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