China hits Canada with tariffs in indirect riposte to Trump

Beijing: China announced tariffs of up to 100 per cent on canola, pork and other foods from Canada on Saturday, in retaliation for Canada's decision last August to collect steep taxes on imports of Chinese electric vehicles, steel and aluminum.

The Chinese tariffs, which take effect on March 20, were also a clear warning to Canada -- and, indirectly, Mexico -- not to cooperate with the United States on trade.

The Trump administration, like the Biden administration before it, has been demanding that Canada and Mexico not serve as back doors for low-cost Chinese goods to enter the US market under North American free trade agreements.

China's State Council Tariff Commission announced Saturday that it would impose tariffs of 100 per cent on canola oil, which is Canada's largest export to China, and on peas, and 25 per cent on Canadian pork and seafood. The commission said the measures were in response to Canada's 100% tariffs on electric cars from China and its 25 per cent tariffs on Chinese steel and aluminum, which took effect in October.

China's Ministry of Commerce said in a separate statement that "China urges Canada to immediately correct its wrong practices, lift restrictive measures and eliminate adverse effects."

The Canadian government had no immediate comment.

The Chinese agencies' statements were carefully worded to comply with World Trade Organization rules and did not mention any effort to influence Canada or Mexico during their current trade discussions with the United States. But a commentary released by Chinese state television left little doubt that a key goal for China is dissuading officials in Ottawa and Mexico City from acceding to American pressure for higher Canadian and Mexican tariffs on Chinese goods.

The Chinese tariffs are "a powerful countermeasure to Canada's wrong choice, and a strong warning to some countries that intend to impose additional tariffs on China in exchange for the United States not to impose additional tariffs on them," China Central Television said.

Prime Minister Justin Trudeau of Canada announced tariffs on imports from China last year, partly to protect heavy government-supported investments by automakers in electric car factories in Canada. But there were also growing concerns and complaints from the Biden administration -- recently echoed by the Trump administration -- that Chinese goods were flooding into Canada.

Partly because of that influx from China, Canadian steel mills, aluminum producers and other manufacturers rely heavily on the U.S. market for their sales, taking advantage of duty-free shipments. Canada and Mexico have both had steeply rising trade surpluses recently with the United States.

By imposing tariffs on Canada's extensive shipments of canola and other agricultural products to China, Beijing's leaders have sent a pointed reminder that China is also a large market.

Canada exported $3.29 billion worth of canola, also known as rapeseed and used in animal feed and cooking, to China last year, which was 13.4% of Canada's overall exports to China. Canadian exports of rapeseed to China surged last autumn as traders rushed to sell supplies to Chinese stockpiles before tariffs could take effect.

The Chinese government had said in late September that it would take up to a year to decide how to respond to the Canadian tariffs. It decided to act sooner after President Donald Trump imposed 25% tariffs this week on imports from Canada and Mexico but then quickly suspended them for cars and many other goods.

China may have a little more trade leverage with Canada than with Mexico. For each dollar of Canadian or Mexican goods that China imports, China sells $3 of goods to Canada and almost $5 of goods to Mexico.

China's exports to Mexico have doubled since 2019 as gasoline-powered Chinese cars in particular have rapidly increased their sales there at the expense of American and European manufacturers with factories in Mexico.

China's action on Saturday is certain to reawaken unpleasant memories in Canada about a similar Chinese tariff on Canadian canola for two years starting in February 2019. China imposed that tariff after Canadian authorities detained Meng Wanzhou, a top executive of Chinese telecommunications giant Huawei, on a warrant from the United States.

China also imprisoned two Canadians then under harsh conditions, while Canada allowed Meng to live in a Vancouver mansion while awaiting a decision on her legal status. The United States, Canada and China eventually worked out a deal in which all three detainees were allowed to return to their home countries, but public opinion of China in Canada soured considerably during the dispute.