China announced Tuesday that it will launch an anti-dumping investigation into Canadian canola, an apparent retaliatory measure against Ottawa’s huge tariffs on imported Chinese electric vehicles.
Prime Minister Justin Trudeau announced in late August a 100% surtax on imports of Chinese electric vehicles starting in October in the name of supposed “unfair competition.”
“China does not play by the same rules as other countries,” he said to justify this decision intended to “defend Canadian jobs and interests.”
The Canadian surcharges target Chinese-made cars, trucks, buses, as well as electric delivery vans and some hybrid models.
The only electric vehicles manufactured in China and imported into Canada are, for the moment, those of the American brand Tesla.
Beijing had repeatedly threatened retaliation.
On Tuesday, China’s Ministry of Commerce said it “will initiate an anti-dumping investigation into imported rapeseed from Canada,” without specifying a timetable.
In fact, this investigation specifically targets canola, a plant related to rapeseed and developed in Canada. It is mainly used as an edible oil.
“Unfair competition”
Canada is one of the world’s leading producers of canola, an oilseed used to make cooking oil, animal feed and biodiesel, and China has historically been one of its major customers.
According to Beijing, Canadian rapeseed exports to China “increased significantly” to $3.47 billion (€3.14 billion) in 2023, with prices that “continued to fall.”
Canadian exporters are thus “suspected of practicing dumping” on the Chinese market, the ministry believes.
Dumping involves selling abroad at prices lower than those charged on the domestic market and therefore distorting competition.
“Hit by unfair Canadian competition, Chinese industries linked to rapeseed continue to suffer losses,” stressed the ministry, which is considering referring the matter to the World Trade Organization (WTO).
China “will take all necessary measures to defend the legitimate rights and interests” of its companies, he stressed.
Relations between Ottawa and Beijing have been at loggerheads for several years, particularly since the Huawei crisis and the arrest in 2018 of Meng Wanzhou, the Chinese group’s financial director, followed by the imprisonment in China of two Canadian citizens.
Surcharges
In recent years, Chinese car brands have been accelerating their conquest of the foreign market, with many Western countries now worried about seeing their markets flooded with cut-price vehicles.
The European Union (EU) believes that their prices are artificially low due to Chinese state subsidies, which distorts competition and harms the competitiveness of European manufacturers.
In July, Brussels increased its surcharges on electric vehicles imported from China. From October, they could reach up to 36%.
Vehicles manufactured in Chinese factories were previously taxed at 10% in the EU.
In August, China brought the matter before the World Trade Organisation and in recent weeks launched several anti-dumping investigations targeting certain European products (dairy and pork products, spirits).
Determined to slow China’s progress in the automobile sector, the United States announced in May the quadrupling of customs duties (from 25% to 100%) on imported Chinese electric vehicles.