China has escalated its trade dispute with Canada by taking the matter to the World Trade Organization (WTO). The move comes in response to Ottawa’s imposition of new tariffs on Chinese electric vehicles, steel, and aluminum products. Last month, Canadian Prime Minister Justin Trudeau announced a 20% tariff on Chinese electric vehicles and a 25% tariff on Chinese steel and aluminum products, citing concerns that China is not adhering to the same environmental and labor standards as other countries.
China has vehemently criticized these measures as unfair and discriminatory. As a potential act of retaliation, China launched anti-dumping investigations into Canadian canola and chemical product exports earlier this week. On Friday, Beijing’s commerce ministry officially announced its request for consultations with Canada at the WTO regarding the additional tariff measures. The ministry spokesperson issued a statement condemning Canada’s actions, stating that they “violated WTO rules and commitments.” They labeled the tariffs as “unilateral and trade protectionist” actions, accusing Canada of “seriously damaging the rules-based multilateral trading system” and disrupting global supply chains for electric vehicles, steel, and aluminum.
China has made it clear that they “fully oppose” these tariffs and are urging Canada to comply with WTO rules and “immediately correct its erroneous practices.” The steel and aluminum surtax is set to take effect on October 15.
The dispute extends beyond just tariffs on electric vehicles. Earlier this week, China’s commerce ministry announced its intention to launch an anti-dumping investigation into canola imports from Canada. The move came shortly after Canada announced tariffs on Chinese electric vehicles, resulting in a surge in the price of domestic rapeseed oil futures to a one-month high.
Canola, which is also known as rapeseed for certain varieties, is a vital agricultural product, serving as a cooking oil and a key component in renewable fuels. China is the world’s largest importer of oilseeds, and over half of Canada’s canola exports are destined for the Chinese market. The Canola Council of Canada expressed confidence that China’s investigation would demonstrate that Canadian producers are adhering to international trade regulations. They highlighted the significant economic value of these exports, stating that Canadian canola exports to China reached C$5.0 billion ($3.7 billion) last year.
In addition to the canola investigation, China announced a separate investigation targeting “relevant Canadian chemical products.” This investigation was triggered by applications from domestic industries in China.
These recent developments are just the latest in a series of trade disputes between China and Western countries. The United States and the European Union have imposed tariffs of 100% and 36% respectively on Chinese EVs. They argue that Beijing provides unfair subsidies to domestic EV manufacturers, enabling these products to flood foreign markets and undercut local competitors.
China has refuted these allegations and has launched investigations of its own. In response to the EU’s tariffs on imported EVs, China appealed to the WTO’s dispute settlement mechanism last month. The ongoing trade disputes highlight the increasing tensions and economic rivalry between China and Western nations, with significant implications for global trade and supply chains.
