China can’t use Canada as trade path for cheap goods, Freeland says

Canada won’t allow itself to become a foothold for oversupplied Chinese goods that could pass through to its democratic allies, Finance Minister Chrystia Freeland said.

But she did not commit to following the path of US President Joe Biden, who announced massive tariff hikes against Chinese goods earlier this month. For now, Canada is simply reviewing its trade measures toward China, Freeland said. 

“Canada absolutely recognizes that China has an intentional, state-directed economic policy which is leading to overcapacity and oversupply in specific sectors,” Freeland told reporters on Tuesday. She said the Asian country isn’t “playing by the rules” when it comes to steel, aluminum, some critical minerals and metals and manufacturing products.

“We cannot let Canadian industry be wiped out by Chinese oversupply and overcapacity,” Freeland said.

She pointed out Canada also has a free trade agreement with every other Group of Seven country, and suggested China could try to exploit those connections.

“Canada will not be a country through which there can be transshipment, and we’re very mindful of that,” Freeland said.  

The new US tariffs quadrupled the country’s tariffs on Chinese-manufactured electric vehicles, bringing the rate up to 102.5%, and targeted other products including semiconductors and solar cells. Canada currently imposes a small tariff of about 6% on Chinese vehicles.

Prime Minister Justin Trudeau and Trade Minister Mary Ng have said Canada is watching what the US has done, but have declined to say whether Canada intends to hike its own tariffs.

Trudeau’s government has also been cracking down on Chinese investment in certain mining sectors, and is further toughening its investment screening rules in artificial intelligence, quantum computing and space technology.