Anti-dumping investigations into canola seeds and chemical products imported from Canada by China
China announced on Tuesday, September 3, that it will launch anti-dumping investigations into canola seeds and chemical products imported from Canada. This action appears to be a response to recent Canadian tariffs on Chinese electric vehicles and steel and aluminum products.
Last week, Canada followed the lead of the United States and the European Union by imposing a 100% tariff on imported Chinese electric vehicles and a 25% tariff on steel and aluminum from China. Canadian Prime Minister Justin Trudeau accused China of failing to adhere to the same environmental and labor standards as other countries.
A spokesperson for China's Ministry of Commerce stated in a release: "Despite widespread opposition and warnings, Canada has adopted discriminatory unilateral restrictions on imports from China. China expresses strong dissatisfaction and firm opposition to this." The statement continued, "China will initiate an 'anti-discrimination investigation' into Canada's related restrictive measures in accordance with Articles 7 and 36 of the Foreign Trade Law of the People's Republic of China."
Canada, the world's largest exporter of canola seeds, which are used widely in food and biofuel production, faces this scrutiny as China is the largest global buyer of oilseeds.
The Ministry of Commerce noted, "Canadian canola seed exports to China have significantly increased and are suspected of being dumped, reaching $3.47 billion in 2023, a 170% year-on-year increase, while prices continue to decline." The statement added, "Due to unfair competition from Canada, China's domestic canola seed industry continues to suffer losses."
Following the announcement, the Zhengzhou Commodity Exchange's canola meal futures rose by 5.49% to 2,363 RMB per ton (approximately $331.8), the highest level since August 6.
The spokesperson further revealed that, in addition to the anti-dumping investigation into Canadian canola seeds, China will also investigate related chemical products from Canada. China also plans to bring the matter before the World Trade Organization (WTO) dispute resolution mechanism.
In May of this year, U.S. President Joe Biden announced a 100% tariff on Chinese electric vehicles, a 50% tariff on semiconductors and solar cells, and a new 25% tariff on lithium-ion batteries and strategic materials, including steel, to protect domestic industries from Chinese overproduction. The EU decided to impose additional tariffs on Chinese electric vehicles ranging from 9% to 36.3%, depending on the manufacturer.
Canada's new additional tariff on electric vehicles will be imposed on top of the existing 6.1% import duty and will take effect on October 1. Furthermore, Canada will restrict electric vehicle subsidies to those manufactured in countries with which Canada has free trade agreements, excluding Chinese-made vehicles. Additional tariffs on Chinese steel and aluminum imports will take effect on October 15.
In recent years, China and Canada have clashed over a range of issues from trade and technology to human rights. Relations between the two countries soured following the 2018 detention of Huawei executive Meng Wanzhou in Canada.