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Tariffs

China's Economic Coercion: A Threat to Canada's Sovereignty and Economic Security

Strategic Insights

— 2 min read

Vina Nadjibulla, Vice-President of Research and Strategy at the Asia Pacific Foundation of Canada, argues that China's anti-dumping tariff on Canadian canola seed imports is an unmistakable act of economic coercion, aimed at inflicting maximum pressure on Canada just before the canola harvest. This move is part of China's playbook, which has been used repeatedly to punish democracies, particularly in trade disputes. The stakes are high, and it's crucial for Canada to understand the nature of the Chinese Communist Party's pressure tactics and respond strategically to maintain its sovereignty and economic security.

Key Takeaways:

  • China's 75.8-percent anti-dumping tariff on Canadian canola seed imports is an economic coercion tactic, aimed at inflicting maximum pressure on Canada before the canola harvest.
  • This is not an isolated incident; China has used similar tactics in the past, including halting imports of Canadian canola seeds in 2019 due to Canada's detention of Huawei's CFO, Meng Wanzhou.
  • Canada's economy is vulnerable to future coercion due to its overdependence on trade with China and the U.S.
  • The Canadian government should provide immediate support to canola farmers and pursue a longer-term strategy to de-risk from both China and the U.S. by diversifying trade and developing alternative domestic uses for canola.
  • Strengthening rules-based trade through agreements like CPTPP, CETA, and new free-trade agreements with trusted partners in Asia and Europe should be a priority.
  • Diplomacy with China should continue, but it must be grounded in a clear-eyed understanding of the nature of the Chinese Communist Party and its pressure tactics.

Statistics:

  • 75.8%: China's provisional anti-dumping tariff on Canadian canola seed imports
  • 100%: Tariffs on Canadian electric vehicles (EVs) imposed by China in retaliation for Canada's similar tariffs
  • 2019: Year in which China halted imports of Canadian canola seeds over Canada's detention of Huawei's CFO, Meng Wanzhou
  • $100 billion: Estimated losses for Prairie farmers and exporters due to China's 2019 canola import halt
  • CPTPP: Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade agreement aimed at promoting free trade among Pacific Rim countries
  • CETA: Comprehensive Economic and Trade Agreement, a trade agreement between the European Union and Canada
  • $65 million: Estimated value of Canadian EV manufacturing capacity
  • 2020: Year in which Canada imposed tariffs on Chinese EVs

Sources:

  • Nadjibulla, Vina. Op-ed piece, Asia Pacific Foundation of Canada
  • "China halts imports of Canadian canola seeds". Reuters, March 5, 2019.
  • "Canada to impose tariffs on Chinese electric vehicles". CBC News, January 15, 2020.
  • "CPTPP: A new era of trade in the Asia-Pacific". World Economic Forum, March 8, 2018.
  • "CETA: A comprehensive trade agreement between the EU and Canada". European Union website, March 2017.

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