In the latest round of Chinese-Canadian trade warfare, China is hitting Canada where it really hurts: its 20 million acres of canola fields.
What happened: China says it’s launching an investigation into whether Canadian canola is harming its domestic industry by flooding the market with cheap products, just days after Canada said it would roll out a 100% surtax on Chinese-made EVs for the same reason.
- Beijing launched a similar probe into EU dairy products a day after the bloc proposed a plan to enact a tariff of up to 36.3% on Chinese-made EVs.
Why it matters: Canola was Canada’s top export to China last year — not top crop export, top export period — bringing in $3.84 billion. The probe could result in export restrictions, which would be a massive hit at a time when Canada is losing market share to Australia.
- This isn’t the first time China has used canola as a cudgel against Canada, curbing imports between March 2019 and May 2022, which cost the industry billions.
Big picture: Policymakers made a calculated risk, betting that potential hits in other sectors will be worth it to ward off rapidly encroaching Chinese EVs and to protect the ~$52 billion in investments Canada has made to secure its position in the nascent EV supply chain.—QH