In a move widely seen as retaliation, China announced on Tuesday it would launch anti-dumping investigations into Canadian canola and chemical products, further intensifying trade tensions between the two nations.
China’s commerce ministry Announced on Tuesday that it would launch an anti-dumping investigation into Canada Canola imports after receiving numerous complaints from the domestic canola industries. While the government cited reasonable grounds for investigation, many believe that this move was in response to Canada’s decision to impose tariffs on Chinese Electric Vehicles, aluminium and steel products.
Canada’s tariffs on China, a strategy to stop global dominance?
Last month, Canadian Prime Minister Justin Trudeau announced tariffs of hundred percent on Chinese EVs, citing concerns over China’s alleged subsidization of its domestic EV industry, which he claimed allows Chinese manufacturers to flood international markets with cheaper products that undermine local industries. Trudeau also accused China of “not playing by the same rules as other countries” in areas like environmental and labour standards.
The tariffs, which will take effect on October 1, add to an existing 6.1 per cent duty on imports and apply to a wide range of Chinese vehicles, including electric and hybrid passenger cars, trucks, buses, and delivery vans. In addition to this, a separate surtax of 25% will be applied on Chinese steel and aluminium products. Canada has also restricted EV incentives to producers from China.
ANTI- CHINA alliance
when asked about the high tariffs, Trudeau said the tariffs were being introduced “in alignment and in parallel with other economies around the world”. The U.S. imposed a 100 per cent levy on Chinese EVs, while the EU implemented a 36 per cent tariff. Both Western powers have accused China of unfairly subsidizing its EV industry, enabling it to dominate global markets at the expense of foreign competitors.
China’s Response
China’s Ministry of Commerce responded by launching an Anti-dumping investigation into Canada’s Canola and Chemical imports . This measure is seen as a necessary step to safeguard the local industries.
The ministry noted that the Canola exports from Canada have increased by 170 percent, amounting to $3.47 Billion in 2023. While the prices have decreased, the Canadian exporters are dumping products in markets thus reducing the capacity of China’s domestic Canola industries to compete. “China … will take all necessary measures to defend the legitimate rights and interests of its enterprises,” the ministry stated.In addition to the canola probe, Beijing, plans to challenge the measures at the World Trade Organisation’s (WTO) dispute resolution system.
The announcement of China’s anti-dumping probe has already affected markets. Canola futures in North America fell sharply, with prices declining by the daily limit on Tuesday amid fears that reduced Chinese demand could lead to a surplus in Canada. Conversely, the most actively traded rapeseed meal and rapeseed oil futures on China’s Zhengzhou Commodity Exchange surged, reflecting market concerns about potential supply disruptions.
