In October 2024, an economic conflict between Canada and China started. The dispute started from Canadian push back against perceived anti-competitive practices and market distortions caused by Chinese government subsidies. In response, China launched an "anti-discrimination probe," resulting in tariffs that impacted sectors including electric vehicles (EVs), steel, aluminum, and agricultural products.
| Canada–China trade war | |||
|---|---|---|---|
| Part of Canada–China relations | |||
| Date | October 1, 2024 – January 16, 2026 (1 year, 107 days) | ||
| Location | |||
| Caused by |
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| Status | Resolved
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| Parties | |||
| Lead figures | |||
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The conflict arose in late 2024 when Canada implemented a 100% tariff on Chinese EVs and additional duties on steel and aluminum. By March 2025, China retaliated with substantial tariffs on Canadian rapeseed oil, peas, and pork, specifically targeting agricultural exports of Western Canada. The trade war occurred simultaneously with other trade wars both countries were involved in against the United States, including the China–United States trade war and the Canada–United States trade war.[1]
Following a change in Canadian leadership in early 2025, Canadian Prime Minister Mark Carney and CCP General Secretary Xi Jinping held a series of bilateral meetings to improve relations. On 16 January 2026, Carney made a trip to Beijing and announced a preliminary agreement in which Canada would significantly reduce EV tariffs in exchange for China lowering tariffs on Canadian canola oil and suspending tariffs on other agricultural exports. However, Canadian tariffs on Chinese steel still remained in effect.
Background
editIn August 2024, trade relations between China and Canada deteriorated substantially when Canada announced plans to implement substantial tariffs on various Chinese manufactured goods, following similar protectionist measures previously enacted by the United States and European Union. These Western nations collectively cited concerns regarding Chinese government subsidies providing unfair competitive advantages to Chinese industries.[2]
Chronology
edit2024
edit- 1 October: Canada implemented a 100% tariff on Chinese electric vehicles, mirroring similar protectionist measures previously enacted by the United States and European Union.[3][4]
- 15 October: Canada implemented an additional 25% tariff on Chinese steel and aluminum, citing concerns about market distortion and unfair competition.[3][5]
2025
edit- 8 March: China's Customs Tariff Commission of the State Council announced retaliatory tariffs on imports of several Canadian agricultural products, following an "anti-discrimination probe".[3] The products targeted represented significant export sectors for Canadian agricultural producers, particularly in western Canadian provinces where rapeseed production forms a substantial component of agricultural output.[6]
- 20 March: China implemented a 100% tariff against Canadian rapeseed oil, peas, and oilcakes, in addition to a 25% tariff on Canadian "aquatic products" and pork.[3][7]
- 16 July: Canadian Prime Minister Mark Carney announced that Canada would implement higher tariffs on Chinese steel contained in intermediate goods from additional countries (excluding the U.S.).[8]
- 31 October: Carney attended APEC South Korea 2025 and held a bilateral meeting with Chinese President and CCP General Secretary Xi Jinping to discuss trade-barriers related to agriculture, canola, electric vehicles, and seafood.[9]
2026
edit- 16 January: Carney made a state visit to China and held a bilateral meeting with Xi. Afterwards, he announced that Canada would lower tariffs on up to 49,000 Chinese EVs per year from 100% to 6.1%. In exchange, China is expected to lower tariffs on Canadian canola oil from 85% to 15% by 1 March, and affirmed that it would not implement anti-discrimination tariffs on Canadian canola meal, lobsters, crabs, and peas from 1 March to the end of 2026. However, Canadian tariffs on Chinese steel will remain in effect.[10]
Effects
editCanada
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China
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Reactions
editCanada
editCanada justified its tariff implementation as necessary to protect domestic industries from what it considered to be anti-competitive practices and market distortion by China.[3]
China
editChina rejected Canada's justification for the tariffs, and instituted retaliatory tariffs following an "anti-discrimination probe" conducted by Chinese officials. The investigation reportedly concluded that Canada's earlier restrictive measures against Chinese products had been implemented without proper investigative procedures.[6]
On 8 March 2025, China's customs authorities released a statement characterizing Canada's actions as having disregarded "objective facts and World Trade Organization rules". The statement specifically outlined what it referred to as discriminatory measures specifically targeting China that infringed on the nation's economic interests while undermining bilateral relations.[3]
United States
editFollowing the announcement of the trade deal between China and Canada, U.S. Secretary of Transportation Sean Duffy claimed that Canada would regret their decision to relax import restrictions on Chinese EVs. U.S. Trade Representative Jamieson Greer also claimed that Canada would regret their decision and explained that the United States would maintain their tariffs on Chinese EVs due to protectionism and cybersecurity concerns.[11]
U.S. President Donald Trump threatened to impose 100% tarriffs on Canada if the deal were to be implemented.[12]
See also
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References
edit- ↑ "Trump's trade war draws swift retaliation with new tariffs from Mexico, Canada and China". AP News. 4 March 2025. Retrieved 8 March 2025.
- ↑ Brinley, Stephanie (13 September 2024). "Canada preparing for new tariffs on mainland Chinese products". Retrieved 5 June 2025.
- 1 2 3 4 5 6 Meredith, Sam (8 March 2025). "China to impose retaliatory tariffs on some Canadian products as trade war heats up". CNBC. Retrieved 8 March 2025.
- ↑ Canada, Department of Finance (26 August 2024). "Canada implementing measures to protect Canadian workers and key economic sectors from unfair Chinese trade practices". www.canada.ca. Retrieved 8 March 2025.
- ↑ Chiang, Sheila (27 August 2024). "Canada to slap 100% import tariffs on Chinese electric vehicles over 'unfair' competition". CNBC. Retrieved 8 March 2025.
- 1 2 "China imposes retaliatory tariffs on Canadian farm and food products". AP News. 8 March 2025. Retrieved 8 March 2025.
- ↑ Boynton, Sean. "China's tariffs on Canada are in place. What are they targeting?". Global News. Retrieved 31 March 2025.
- ↑ Previl, Sean (16 July 2025). "Canada targets China with higher tariffs as part of steel industry measures". Global News.
- ↑ Brewster, Murray (31 October 2025). "Carney and Xi agree to tackle 'irritants' in Canada-China relationship". CBC News. Retrieved 1 November 2025.
- ↑ "Prime Minister Carney forges new strategic partnership with the People's Republic of China focused on energy, agri-food, and trade" (Press release). 16 January 2026. Retrieved 26 January 2026.
- ↑ Shepardson, David (17 January 2026). "US says Canada will regret decision to allow Chinese EVs into their market". Reuters. Retrieved 10 April 2026.
- ↑ "Trump says US will have 'very substantial' response if Canada enacts trade deal with China". Reuters. 2 February 2026. Retrieved 10 April 2026.