Experts predict that China will likely retaliate against Canada after the Canadian government raised tariffs on Chinese-made electric vehicles and other materials. However, the retaliation is not expected to endanger Canadians.
The increase in tariffs, including a 100% tariff on Chinese EVs and a 25% tariff on Chinese steel and aluminum, aligns Canada with the United States’ previously announced tariffs. Both countries implemented these measures to counter what they see as unfair Chinese subsidies in the global market.
Although China’s commerce ministry expressed concern that Canada’s actions could disrupt global industrial and supply chains, they did not explicitly promise retaliation. Conversely, China’s foreign ministry spokesperson stated that China would take any necessary steps to protect its economy.
While China previously vowed to retaliate against the U.S., it has yet to follow through. Therefore, analysts caution that Canada should not expect the same treatment from China. According to Moshe Lander, an economics professor at Concordia University, China is unlikely to accept economic sanctions without retaliating.
One reason for this difference in treatment, as Lander and other analysts explain, is the disparity between the U.S. and Canada’s economies and how China perceives its actions towards each country. Vina Nadjibulla, from the Asia Pacific Foundation of Canada, believes that China’s response may resemble how they retaliated against the European Union in the past.
In response to the EU imposing tariffs on Chinese EV imports, China initiated an anti-subsidy probe into European dairy imports. This move is seen as retaliatory, and Nadjibulla suggests that Canada could also face a similar tit-for-tat response from China.
China may be waiting for a final decision from the U.S. on potential tariff reductions and could adjust its response accordingly. Canada could also follow suit if the U.S. reduces its proposed tariffs, affecting China’s reaction.
In a meeting with the Liberal cabinet, U.S. White House National Security Advisor Jake Sullivan emphasized the importance of coordination between the U.S. and Canada on China-related matters. He highlighted concerns about Chinese overcapacity in the EV industry and its impact on national security.
Foreign Affairs Minister Melanie Joly indicated that Canada will continue to defend its interests against China. Despite engaging diplomatically with China, Joly assured reporters that Canada would prioritize its interests and hinted at more actions against China in the future.
Regarding the potential threat to Canadians in China due to the tariff announcement, Canadian officials will closely monitor the situation. The current travel advisory for China advises Canadians to exercise caution due to the risk of arbitrary enforcement of local laws.
Overall, experts believe that the Canadian government has created a political risk with these tariffs, potentially creating challenges for future leaders. They stress the importance of an exit strategy if China meets specific requirements, such as reducing domestic subsidies, to avoid accusations of yielding to Chinese pressure.
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