Background on the Parties Involved
China, a significant global trading power, has filed a complaint with the World Trade Organization (WTO) regarding Canada’s imposed tariffs on steel and aluminum products, as announced by the WTO on Wednesday.
The disputed measures include additional tariffs, in the form of quotas, on certain steel imports originating from Canada’s trade partners without free-trade agreements. This includes China, as stated in the WTO notification.
Moreover, China is contesting tariffs on specific products containing steel or aluminum originating from the country.
Canadian Tariff Measures
In July, Canadian Prime Minister Mark Carney declared that Canada would apply a 25% tariff to all steel imports from countries including those exporting steel slabs and billets to China.
Canadian Justification
According to Maninder Sidhu, Minister of Commerce’s spokesperson Huzaif Qaisar, “We will not hesitate to act when our industries are threatened by unfair practices.”
Qaisar further explained via email, “These measures are a direct response to China’s excess capacity and behavior that are undermining Canada’s steel sector and threatening Canadian jobs.”
China’s Perspective
China argues that these tariffs are an unjustified restriction of its legitimate trade interests and are contrary to Canada’s WTO commitments.
China asserts that the tariffs are not based on any evidence of dumping or subsidization and are therefore inconsistent with Canada’s obligations under the Anti-Dumping Agreement and the WTO dispute settlement process.
Potential Impact
This WTO lawsuit by China against Canada could lead to increased trade tensions between the two nations. If China’s case is successful, it might compel Canada to revise its tariff measures.
Conversely, if Canada defends its position and wins the case, it could strengthen its stance on protecting domestic industries from what it perceives as unfair trade practices by other countries.
Key Questions and Answers
- What is the main issue? China contests Canada’s additional tariffs on steel and aluminum imports, arguing they are unjustified and violate WTO commitments.
- What specific measures does China object to? China opposes tariffs in the form of quotas on steel imports from non-FTA partners, including China, and tariffs on products containing steel or aluminum from Canada.
- Why did Canada impose these tariffs? Canada implemented the 25% tariff on steel imports to safeguard its domestic industry from what it considers unfair trade practices, particularly those originating from China.
- What could be the outcome of this WTO lawsuit? The lawsuit might result in increased trade tensions, potential revisions of Canada’s tariff measures, or reinforcement of Canada’s position on protecting domestic industries from perceived unfair trade practices.
