China launches investigation into Canada's EV restrictions

China has launched an anti-discrimination investigation into Canada's recent trade restrictive measures targeting imports of Chinese-made electric vehicles and steel and aluminum products, the Ministry of Commerce said on Thursday.

He Yongqian, spokeswoman for the ministry, said at a news conference that preliminary information and evidence gathered by the ministry indicate that Canada's planned imposition of additional tariffs and other restrictive measures on Chinese imports are discriminatory trade practices under Chinese law.

The anti-discrimination probe, which started on Thursday, will continue for three months and, if deemed necessary under special circumstances, its duration will be further extended, the ministry said in an online statement.

In late August, Canada announced a 100 percent surtax on the import of EVs manufactured in China, which will take effect on Oct 1. It also announced a 25 percent surtax on imported Chinese steel and aluminum products, which will take effect on Oct 15.

While Canada's tariff plan follows those of the United States and the European Union, Brussels has recently agreed to push forward negotiations with Beijing on a price undertaking — an alternative to imposing hefty duties — and reach a solution acceptable to both sides through dialogue and consultation.

Analysts said that even though Canada's actions are blatantly discriminatory and protectionist, countermeasures taken by China are being carried out within the boundaries of compliance and legality under the framework of the World Trade Organization.

This is the first such probe initiated by China, and also the first of its kind in the world, said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

"Canada has blindly followed the US and the EU, without conducting its own investigation or research. It has been extremely subjective, malicious and reckless in announcing these restrictions," he said.

The WTO's core principles can be summarized as nondiscrimination, fair trade and transparency — all of which Canada's actions have flagrantly violated, Tu said.

China's "anti-discrimination investigation is aimed at taking compliant and legal measures to defend the legitimate rights and interests of Chinese enterprises", he added.

In 2023, China maintained largely balanced goods trading ties with Canada, with the total import and export value reaching $88.99 billion, according to data from the General Administration of Customs.

Out of the total value, China's exports to Canada amounted to $45.08 billion, while its imports from Canada were worth $43.91 billion, resulting in a near equilibrium in the flow of bilateral trade.

The export of Chinese EVs to Canada accounts for around 2 percent of China's total goods entering the Canadian market.

It is clear that Canada's actions reflect some political calculations and are not based on legitimate economic concerns, said Liang Ming, director of the Institute of International Trade at the Chinese Academy of International Trade and Economic Cooperation.

The deep integration of economic globalization means the interests of all countries are now intensely intertwined, Liang said, adding that Canada's excessive protectionist trade policies will undermine the stability of global supply chains, ultimately harming the interests of its own consumers and other participants.

China has also initiated an anti-dumping probe into the import of Canadian canola and certain petrochemical goods.

China imported about 5.49 million metric tons of canola in 2023, with around 5.05 million metric tons of the total imports, or 92 percent, coming from Canada. The total value of Canadian canola imports reached $3.47 billion last year, according to the Ministry of Commerce.