Canada’s trade conflict with China continues to escalate, with the Canadian Ministry of Finance announcing on Tuesday (September 10) the initiation of a 30-day consultation period in response to China’s “unfair trade practices.” During this period, Canada will determine whether to impose additional tariffs on key mineral products, batteries and components, solar energy products, and semiconductors from China.
Finance Minister Chrystia Freeland stated that the consultation period will begin on Tuesday and conclude on October 10.
Freeland mentioned that a 30-day review of the Customs Tariff Act will now commence to study the necessity of imposing tariffs on batteries and components, semiconductors, key mineral products and metals, as well as solar energy products.
If tariffs are imposed, Canada will align with its ally, the United States, which announced earlier this spring its plan to impose tariffs on similar products.
In a statement released on Tuesday, the Canadian Ministry of Finance expressed that “Canadian workers, the automotive industry, and related key manufacturing supply chains currently face unfair competition from Chinese producers who benefit from China’s deliberate, state-led overcapacity policies and a lack of rigorous labor and environmental standards. This unfair competition threatens Canadian and global workers and businesses, undermining Canada’s long-term economic prosperity.”
Minister Freeland emphasized, “Our economy needs fair competition in the global market to achieve growth and ensure the prosperity of Canadian workers. Allowing China’s deliberate, state-led overcapacity policies and other non-market behaviors to persist may result in a skyrocketing influx of imports produced under weak labor and environmental standards. This could undermine the competitiveness of Canada’s electric vehicle industry and related key manufacturing sectors domestically and internationally. That’s why we must take action alongside our major trading partners to create a level playing field and protect Canadian workers.”
On August 26, Canada announced an increase in tariffs on electric cars manufactured in China from 6% to 106%, effective October 1; Canada also imposed a 25% additional tax on Chinese steel and aluminum products, effective October 15.
In retaliation, last week China filed a complaint with the World Trade Organization against Canada’s increased tariffs on electric cars manufactured in China. China also initiated an anti-dumping investigation into canola seeds originating from Canada.
Canadian Agriculture Minister Lawrence MacAulay responded by stating that Canada upholds “rules-based trade” and that the country’s products meet the highest standards, with a robust inspection system in place.