Leapmotor vehicles are parked outside a showroom in Hangzhou in eastern China's Zhejiang province on May 14. China has launched a complaint against Canada at the World Trade Organization over recently announced tariffs on Chinese electric vehicles, aluminum and steel.Caroline Chen/The Associated Press
China’s government has opened a new front in its dispute with Canada over tariffs Ottawa imposed on Chinese-made electric vehicles, as well as steel and aluminum goods.
Beijing announced Friday it has requested talks with Canada at the World Trade Organization, a global trade referee, over the tariffs announced by Ottawa in late August.
It’s the second response from China this week. On Tuesday, China accused Canada of dumping Canadian canola at cut-rate prices in the Chinese market and announced an investigation into whether this is causing harm to domestic canola producers.
Such an investigation is expected to be a prelude to retaliatory trade action against Canadian canola. For example, several years ago China, during a broader dispute with Australia, accused Australian producers of dumping barley in its market and imposed 80.5-per-cent tariffs on imports – a punitive measure that lasted more than three years.
The Chinese government on Friday accused Canada of flouting WTO rules by imposing these tariffs. Both countries are members of the WTO.
Ottawa on Aug. 26 joined the U.S. and European Union and imposed a 100-per-cent tariff on Chinese EVs and a 25-per-cent tariff on its imported steel and aluminum. Canada justified the tariffs on EVs by accusing China of subsidizing and overproducing electric vehicles and flooding global markets – a tactic that could help drown out competitors.
“On Sept. 6, China lodged a request for consultations with Canada at the WTO regarding Canada’s additional tariffs on electric vehicles and steel and aluminum products,” a Friday statement from China’s Commerce Ministry said.
“Canada has disregarded WTO rules and violated its commitments within the WTO by proposing to impose additional tariffs of 100 per cent and 25 per cent.”
“China urges Canada to abide by WTO rules and immediately correct wrongdoings,” the statement said.
International trade expert Lawrence Herman said China’s response to the Canadian tax on EVs was expected.
He said he has doubts that China will carry out a fair investigation into its accusations that Canada is dumping canola in the Chinese market.
Canada has a good argument for its EV tariffs on the grounds it needed to take action to protection national interests, Mr. Herman said. “China’s use of subsidies for electric vehicles to take over foreign markets is clearly an international emergency.”
China introduced a ban on Canada’s canola seeds in March, 2019, months after Beijing detained Canadians Michael Spavor and Michael Kovrig in retaliation for the arrest of Huawei executive Meng Wanzhou on a U.S. extradition warrant.
That ban was lifted two years ago.
The Canola Council of Canada estimated the suspension of licences for two of the country’s biggest exporters, Viterra and Richardson International, may have cost the industry as much as $2.35-billion between the introduction of the ban and August, 2020.
The office of International Trade Minister Mary Ng did not immediately respond to a request for comment.
With a report from Reuters