China is desperate for our canola, and Canada has more leverage than we think.
…
Canola is Canada’s most valuable crop, generating billions in exports each year. Roughly 90 per cent of what we grow is sold abroad, and China has long been one of the top buyers. That’s why Beijing’s decision to impose a 100 per cent tariff on Canadian canola oil and meal and a 75.8 per cent tariff on canola seed in mid-August has hit farmers so hard.
…
Canada doesn’t have to give away the farm to secure a canola deal with China.
China’s ambassador to Canada, Wang Di, says the solution is simple: if Canada drops the EV tariff, China will remove its agricultural tariffs. But Canada may not need to go that far.
China cannot easily replace millions of tonnes of high-quality Canadian seed. Imports from India and Australia don’t match the volume or quality, and Chinese futures markets are already showing strain. If farmers can weather the chill, Canada may have more leverage than expected.
…
The stakes are high. Canada’s auto sector still supports about 125,000 direct jobs, and losing more ground would further weaken our manufacturing base.
There are risks, however. Canadians can’t ignore China’s human rights abuses, from the treatment of Uyghurs in Xinjiang to the crackdown in Hong Kong. And trading dependence on Washington for reliance on Beijing is hardly a cure-all. Any deal must be negotiated from a position of strength, with safeguards to protect Canadian workers and sovereignty.
Which brings us back to canola. China needs it. We’re willing to sell it. But we don’t have to—nor should we—give away the farm.
…
There are risks, however. Canadians can’t ignore China’s human rights abuses, from the treatment of Uyghurs in Xinjiang to the crackdown in Hong Kong. And trading dependence on Washington for reliance on Beijing is hardly a cure-all
Thank you. I’ve been saying that since this whole shitshow started.
Obviously we have to disentangle from the US, but it would be stupid to fully replace one abusive trade partner with another equally abusive one.
Canada has an auto industry? More like outsourced manufacturing. There’s no Canadian automaker (pace Edison) and the western automakers are retreating on the EV front (and thus far have targeted middle-high end range and also used Chinese components in many cases) so they’re less supporting the industry and more bailing out companies that aren’t innovating.
Why Canada would follow the USA in this tariff with the current trade war I can’t understand.
Why Canada would follow the USA in this tariff with the current trade war I can’t understand.
Because there are signs that China’s EV market is on the cusp of collapse. Opening up our markets to their cars now would help them more than it would help us.
Archive link for source.
I’ve been hearing about the imminent collapse of the Chinese economy for years now, though. For some reason it seems like American newspapers aren’t great at forecasting what’s going on over there.
I really only support tariffs if we’re compensating for systemic inequities.
We pay our workers more, value safety higher, and have stricter environmental regulations.
If we tariff to net those aspects out, how much more competitive can our industry get?
Arbitrary tariffs make no sense to me, even if strategic, they need to be grounded in something to prevent our industry from becoming hugely inefficient and falling behind.
I think it’s a very foolish assumption to think that China is incapable of retooling its economy to fix a hole created by a lack of Canadian imports. Their centralized economy allows them to respond much much faster to issues like this than market driven economies.
This leverage may exist now, but look at the US and soy beans. This can dry up in a year or two.
China cant’ find the canola in the relevant quantities and qualities elsewhere. The game Beijing has been playing with Canada this year is the same as in other countries.
More importantly, Canada must diversify its trade anyway - not just regarding the U.S. but any other state that poses a threat to its autonomy. And China is well known for its coercive practices. It’s simply not a reliable partner.
I think the issue isn’t China finding other import partners, but the idea that they could quickly create a domestic industry for canola or comparable oils. Their economic model just allows them to target areas like this and, in a relatively short time, spin up new industries. They aren’t limited by the whims of the market and investors, the state can order these things to be created and subsidize them strongly until the industry can stand on its own. Just look at Chinese cars and tech products. There’s something like 200 Chinese auto brands! I don’t know how many phone and computer manufacturers there are in China, but the CCP specifically targetted both of these industries as points to address while it relied on imports and now their products outclass many foreign options. China is quickly becoming the largest and strongest economy in the world and a lot of that is due to state-directed industry projects focusing on domestic production.
I don’t specifically understand the canola market or industry. Maybe there are some limiting factors that prevent China from producing it domestically that makes this moot, but I just think it’s a risky game to play to assume China cannot produce something domestically in a few years if it becomes economically troublesome to import it.
China has attempted several times to start a canola industry since the Chretien deals and they do not have have the climate nor the agricultural infrastructure to produce canola at scale.
Because of Canada’s fairy unique agricultural history and geography, we’re it. No one else produces canola at our rates by a massive margin.
China can either buy canola from Canada or not at all. Those are the current choices.
I had no idea! Thanks for the info.
We’re talking about agriculture, not some factory making doodads. China does not have millions of acres of idle farmland with the correct climate ready for oilseed production. A command economy can repurpose production in the right places from something to something else, but that is robbing Peter to pay Paul and does not advance food sovereignty.
China also has to worry about discouraging canadian canola farmers into growing something else. If and when they want their oilseed back, they might find it’s simply not there as farmers moved to other compatible crops like pulses etc… It could mean years of shortages and high prices for China.
China has been trying a lot to become self-sufficient, but in some areas they failed. Food is one of them. China is a major food importer, it’s imports exceed by far the exports (often with ration of 20 and 30 to 1).
But even if China would be able to grow canola domestically, it wouldn’t mean too much as Canada must diversify its trade anyway. Just because China isn’t a reliable partner and engages in coercion whenever the government deems it appropriate. Diversifying trade is the only way, not in the least as Canada and other allies can’t ignore human rights, e.g., China’s genocide in Xinjiang and Tibet, its aggression against Taiwan, and so on.
deleted by creator
I don’t agree with the tariffs. Canada does have an auto industry, but as far as Electric Vehicles or batteries are concerned, there’s not much to protect. We don’t have a proper competitive product for EVs, and Canada doesn’t have the infrastructure investments needed to make EVs competitive with ICE vehicles. We’re a smaller market with a huge hinterland and hard winters, and that poses some natural challenges for EVs.
Also, we’re saddled with the Americans, and even they don’t appear to be pursuing EVs or battery technologies at the highest levels with maximum effort. What are these tariffs for, exactly?
Even if Chinese companies were allowed to sell to the Canadian markets, they’d likely be shipped in as final products, and we’d hope they’re not watered down.
Canada’s relationship with the US is not good at the moment, and the Americans are emphasizing onshoring and US manufacturing. Canada will have to balance what it wants with these real considerations. We may have the right value proposition for local manufacture, but that depends on how far out we look into the horizon.
So with all of this in mind, the Vauxhall Advance wants to ask Canola farmers to willingly offer their business as sacrifice to some tariffs that don’t even look like they’re accomplishing much? If anything, China’s negotiations amount to a gesture of please reconsider while we offset your product with other agricultural products from the Belt and Road initiative.
I think that’s a difficult message for the canola farmers to swallow. Everyone sees what happened to the American soy farmers. They’re done. Even after negotiations between the US and China led to a truce, the resulting supply glut and the rise of new competitors in South America will leave a lasting impression.
Our auto industry relies on the US market, you should never rely on the US market so we shouldn’t protect our auto industry.
China has applied tariffs on a key Canadian industry in response to Canada putting unjustifiably high tariffs on one of their key industries simply to make the US happy.
So, wtf is the point of this? We are picking a fight with a major economic power over something that doesn’t serve our own interests, and we’re doing so for the interests of a country that is intentionally crushing and taking away another major Canadian industry.
China is also hardly at the limit of leverage they could exert. They could cause much more harm, even though they’re not. Why do we want hostility with a major economic power over this?
We should be working to de-escalate with China and find agreements that work for both sides, not fighting a battle with them over EVs many Canadians would like access to just to make the US happy.
I refer to my other comments in this thread. China is not a reliable partner, it frequently engages in coercion and bullying it’s “partners,” Canada can’t ignore human right issues in China.
There is no other way for Canada to diversify it’s trade and becoming independent from individual countries, especially China and the U.S.
