Some Tesla Model Y vehicles are built in China and sent to Canada, and they will soon be subject to a tariff.
BEIJING — China said on Aug. 3 it plans to start an anti-dumping investigation into canola imports from Canada, after Ottawa moved to impose tariffs on Chinese electric vehicles, lifting prices of domestic rapeseed oil futures to a one-month peak.
Canada has followed the lead of the United States and European Union, and announced last week a 100-per-cent tariff on imports of Chinese electric vehicles and a 25-per-cent tariff on imported steel and aluminum from China.
"China strongly deplores and firmly opposes the discriminatory unilateral restrictive measures taken by Canada against its imports from China despite the opposition and dissuasion of many parties," a commerce ministry spokesperson said in a statement.
The world's second largest economy imported 5.5 million tons of canola in 2023, valued at US$3.72 billion. Imports from Canada accounted for 94 per cent of the total.
Comparatively, the bulk of China's electric vehicle exports to Canada is from Tesla's Shanghai factory and local Chinese firms have no big exposure to that export market yet.
Canadian imports of automobiles from China to its largest port, Vancouver, jumped 460 per cent year over year to 44,356 in 2023, when Tesla started shipping Shanghai-made EVs to Canada.
The Chinese spokesperson said it intends to resort to the World Trade Organization dispute settlement mechanism for Canada's relevant practices.
The Canadian embassy in Beijing did not immediately respond to a request for comment.
The ministry said China will also initiate an anti-dumping investigation into some Canadian chemical products.
More than half of canola produced in Canada makes its way to China, the world's biggest oilseed importer. Canola, also called rapeseed for certain variants, is used as a cooking oil and in a wide range of products including renewable fuels.
"Canada's canola exports to China have increased significantly and are suspected of dumping, reaching US$3.47 billion in 2023, with a 170-per-cent year-on-year increase in volume and a continuous decline in prices," the ministry said.
"Affected by the unfair competition of the Canadian side, China's domestic rapeseed-related industries continued to suffer losses," it said.
China's rapeseed meal prices have plunged 22 per cent so far this year amid abundant oilseed supply and rising domestic production.
"The current (edible oil) domestic consumption is not strong, and there is an abundant supply of domestic stocks,” said Ma Wenfeng, senior analyst at Beijing-based agriculture consultancy Beijing Orient Agribusiness Consultancy.
China imports its canola predominantly from Canada, followed by Russia and Mongolia.
"Arrivals from Canada have been growing at a fast rate," Ma said.
China has also initiated trade investigations on imports of pork, brandy and dairy from the European Union in response to curbs on its electric vehicle exports.
