China announced up to 100% tariffs on canola, pork and other foods from Canada on Saturday. It retaliated last August last year by Canada's decision to collect sudden taxes on Chinese electric vehicles, steel and aluminum imports.
The Chinese tariffs, which will take effect on March 20, were also a clear warning to Canada and indirectly Mexico. The Trump administration, like the previous Biden administration, has called for Canada and Mexico to not serve as a backdoor for low-cost Chinese products to enter the US market under the North American free trade agreement.
The Customs Committee of China's State Affairs Commission announced on Saturday that it would impose a 100% tariff on canola oil, which is 25% on Canada's largest exports to China and peas, as well as Canola oil, which is 25% on Canadian pork and seafood. The committee said the measure corresponds to a 100% Canadian tariff on electric vehicles from China and a 25% tariff on Chinese steel and aluminum that came into effect in October.
“China is urging Canada to immediately correct its wrong practices, raise restrictive measures and eliminate any negative effects,” the Chinese Commerce Department said in a separate statement.
The Canadian government did not immediately comment.
The Chinese agency's statement was carefully expressed to comply with the World Trade Organization rules and did not mention any efforts to influence Canada or Mexico during the current trade debate with the US. However, there was little doubt that the commentary released by Chinese state television was that China and Mexico City officials would discourage officials in Ottawa and Mexico City, leading to US pressure on higher tariffs in Canada and Mexico on Chinese products.
China's tariffs are “a strong measure against Canada's mis-choice and a strong warning to some countries that intend to impose additional tariffs on China in exchange for not imposing additional tariffs on the US,” China Central Television said.
Canadian Prime Minister Justin Trudeau announced tariffs on imports from China last year to protect large government-backed investments by carmakers at Canadian electric car plants. However, concerns and complaints from the Biden administration have been growing that China's products are flooding Canada.
In part, due to influx from China, Canadian steel factories, aluminum producers and other manufacturers are using tax-free freight and rely heavily on the US market for sales. Canada and Mexico have recently seen a sharp rise in trade surplus in the US.
By imposing tariffs on China on a wide range of Canadian canola and other agricultural products, Beijing leaders have sent sharp reminders that China is also a large market.
Last year, Canada exported $32.9 billion worth of canola, which is used in animal feed and cooking, which was 13.4% of Canada's total exports last year. Canada's rapeseed exports to China skyrocketed last fall.
The Chinese government said it would take up to a year to decide how to respond to Canadian tariffs in late September. President Trump decided to act faster after imposing a 25% tariff on imports from Canada and Mexico this week, but then quickly stopped for cars and many other goods.
China may have a bit more trade leverage with Canada than Mexico. For every dollar of Canadian or Mexican goods imported by China, China sells items worth $3 to Canada and nearly $5 to Mexico.
Exports to Mexico to China have doubled since 2019, particularly as gasoline-powered Chinese cars rapidly increased sales at the expense of American and European manufacturers at their Mexican factories.
China's actions on Saturday certainly awaken unpleasant memories in Canada for two years starting in February 2019 about similar Chinese tariffs on Canadian canola. China has imposed its tariffs after Canadian authorities detained Meng Wanzhou, the top executive of Chinese telecommunications giant Huawei from the United States.
China also imprisoned the two Canadians under harsh conditions, allowing Ms Mann to live in her Vancouver mansion while Canada awaits a decision on her legal status. The US, Canada and China ultimately made deals that allowed all three detainees to return to their home countries, but public opinion in China in Canada was significantly worsened during the conflict.
Amy Chang Chi-en contributed to the research.
