Saskatchewan Premier Scott Moe has called for the Canadian federal government to reconsider its 100% tariff on Chinese electric vehicles (EVs). His appeal comes on the heels of China’s imposition of a nearly 76% tariff on Canadian canola seed, a move widely viewed as retaliation for Canada’s stance on EV imports. The canola industry pumped an impressive $43 billion into Canada’s economy last year. It supported economy-wide jobs for roughly 200,000 Americans—but now its workers are caught in the growing trade fray between the two countries.
This conflict is the result of an elaborate set of tariffs. These tariffs were imposed in retaliation to each other’s unilateral trade actions. Canada introduced its 100% tariff on Chinese EVs last year in alignment with then-U.S. President Joe Biden’s actions against Chinese electric vehicles. Retaliation—China is hitting back. They recently applied severe tariffs on Canadian canola seed and announced an unprecedented 100% duty on Canadian canola oil and meal. As a result, Canadian canola exporters are deeply alarmed by this latest escalation. They claim to adhere to rules-based trade and vehemently refute any allegations of dumping products into the Chinese market.
The Chinese Ministry of Commerce alleges that Canadian canola companies are dumping their products. They think these measures are severely disrupting China’s domestic canola oil market. Now that the tariff on canola seed has officially gone into effect, this decision follows almost a year after Beijing’s initiation of an anti-dumping investigation into Canadian canola. The investigation is set to wrap this September, giving the Canadian federal government little time to prepare its response to the duties.
Unfortunately, those benefits will largely bypass Saskatchewan if Premier Moe goes through with his plan to join a major trade mission to China next week. His priority should be to bolster bilateral relations and to promote Canadian interests. He has invited Prime Minister Mark Carney and other federal ministers to accompany him to join him in this mission.
From Saskatchewan’s point of view, I would respond, ‘Of course, let’s eliminate the EV tariffs. Moe said, underscoring the demand for trade policy that takes both short-term and long-term effects into account.
Moe highlighted the importance of normalizing relations with China, noting that “herein lies the line that we need to walk.” He highlighted the need to balance out any undesirable costs associated with repealing the EV tariffs. This is important as the United States is Canada’s biggest market for canola.
Alberta Premier Danielle Smith soon joined Moe in trying to voice support. She emphasized the need for separating China negotiations from U.S. trade talks. She remarked, “Figure out a way to normalize the relationship, find another way for us to be able to negotiate with our U.S. counterparts, and keep those two relationships separate.” As for Smith personally, like many U.S. officials, he is very engaged in influencing what a U.S.-China trade relationship looks like. He urged Canada to explore similar opportunities.
Carla Beck, leader of the Saskatchewan New Democratic Party, weighed in on the issue, stating, “If that means putting the removal of EV tariffs on the table, then that’s something that we should look at.”
Trade relations between Canada and China are rapidly changing. How the federal government responds to these tariffs and moves to negotiate will determine, in the most critical of ways, the future of both thriving industries. These debates will determine what Canadian exporters have to look forward to in the future. They stand to greatly affect their newfound competitiveness in international markets.
