China and Canada Continue Trade War

March 12, 2025 by Martin Armstrong

Effective March 20, 2025, China will place massive tariffs on Canadian goods. Aquatic products and pork will face a 25% tariff, while other items like rapeseed oil (canola), peas, and oil cakes will see a 100% tax. China is also implementing a 100% tariff on any imported electric vehicles and a 25% tariff on Chinese aluminum and steel.

“Canada does not accept the premise of China’s investigation, nor its findings,” a statement from the Canadian government read. “China’s non-market policies and practices that artificially lower production costs and distort markets. Canada remains open to engaging in constructive dialogue with Chinese officials to address our respective trade concerns.”

Canada first slapped a 100% tariff on Chinese EVs in October 2024, as no one can compete with Chinese EV manufacturers. A few days later, Canada hit China with a 25% tariff on aluminum and steel. All of this happened around the same time that the European Union and the US also placed tariffs on Chinese goods as the West collectively felt that China had an unfair trade advantage due to cheap goods and labor, as well as government subsidies.

Canadian exports to China totaled $$31.1 billion in 2023, with exports from Canada coming in at $59.9 billion. Exports to China have increased by over 6% in the last five years. Gold, petroleum, and rapeseed are Canada’s main exports to China, while China primarily sends Canada cars, computers, and broadcasting equipment. Rapeseed is Canada’s second-largest acreage crop by acreage and China is the largest market for Canadian rapeseed.

The Canola Council of Canada believes canola seed oil and meal exports to China reached C$4.9 billion last year. Canola meal exports came in at 2 million metric tonnes, valued at C$920.9 million, while canola oil exports hit 15,351 metric tonnes with a C$20.6 million value. Pea exports to China reached C$303.6 million last year, fish and seafood came in at C$1.3 billion, and pork at C$486.6 million.

“With this announcement Canadian canola farmers are facing an unprecedented situation of trade uncertainty from our two largest export markets only weeks before planting begins,” says Rick White, Canadian Canola Growers Association (CCGA) President & CEO. “The impact of the federal government’s trade policy decisions is now playing out at the farmgate, making it imperative that government respond with a plan for financial compensation commensurate with the losses incurred.” Around 40,000 Canadian farmers work directly in the canola industry, generating C$43.7 billion annually.

There are various points of contention between the two nations. China recently warned Canada not to meddle in its One China policy after a Canadian frigate passed through the Taiwan Strait after a US military transit. China accused both China and the US of “deliberately causing disruptions and undermining peace and stability.”

China launched an anti-discrimination investigation into tariffs on Chinese EVs. China argues that the West’s near ban on Chinese EVs violates fair trade principles established under the World Trade Organization (WTO). China feels it has been unfairly excluded from the EV market under the guise of protectionism. The truth is that China has cutting edge technology paired with the ability to produce affordable EVs. The West knows it cannot compete with Chinese EVs and have nearly banned them through tariffs, excluding China from the entire EV trade sector.

Canada denies discriminating against Chinese EVs and insists the tariffs were to address China’s “non-market policies and practices that artificially lower production costs and distort markets.” Where is the outrage? Mark Carney demanded that Donald Trump show “respect” amid escalating trade tensions. Canadians began boycotting American made goods. Will we see that same level of aggression toward Xi and China? Of course, Trump did offend Canada by claiming it could become a US state which perhaps angered the people more so than the actual tariffs.

Consumers and businesses always lose amid trade wars. The tariff game has become tit-for-tat, with nations continually “retaliating” despite the reality that these measures are hurting their own economies.