China announced a 100 percent tariff on rapeseed oil, oilcake, and peas from Canada and a 25 percent tariff on aquatic products and pork from the country which will be effective from 20th March. This follows the Ministry of Commerce's (MOFCOM's) ruling on an anti-discrimination investigation into Canada's tariff increases on Chinese electric vehicles (EVs) and steel and aluminium products.

Canadian rapeseed meal accounts for 72% of total rapeseed meal import to China, about 2 million Mts.

The investigation, launched in late September 2024, under Articles 7, 36, and 37 of China's Foreign Trade Law, determined that Canada's measures amount to discriminatory restrictions, disrupting normal trade and harming the legitimate rights and interests of Chinese companies, according to a spokesperson from the MOFCOM.

China will impose tariffs on certain Canadian imports in line with the Foreign Trade Law, the Tariff Law, and other relevant regulations, a MOFCOM spokesperson said.

Following the MOFCOM statement, six major Chinese industry associations and business groups - the China Association of Automobile Manufacturers, the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, the China Iron and Steel Association, the China Nonferrous Metals Industry Association, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, and the China Chamber of Commerce of Import & Export of Foodstuffs, Native Produce & Animal By-Products - voiced support for the ministry's anti-discrimination investigation ruling regarding Canada's restrictive trade practices. They called on Canada to cease its discriminatory actions and commit to maintaining fair trade principles.

This is the first instance of China initiating an anti-discrimination investigation and implemented corresponding anti-discrimination measures under its Foreign Trade Law, Zhou Xiaoyan, executive vice president and secretary-general of the China Council for International Investment Promotion said on Saturday.

Article 7 of China's Foreign Trade Law clearly stipulates that if any country or region imposes prohibitive, restrictive, or similar discriminatory trade measures against China, China may, as the case may be, take measures against the country or region in question.

This article provides a legal basis for China to implement measures safeguarding Chinese companies' interests against Canada's discriminatory actions, Zhou said.

Shi Xiaoli, director of the WTO Law Research Center at China University of Political Science and Law, observed that the 100 percent tariffs on Canadian rapeseed oil, oilcake, and peas, along with the 25 percent tariff on aquatic products and pork, embody the principle of reciprocity under China's Foreign Trade Law.

Canada announced in August 2024 that it would impose a 100 percent tariff on imports of Chinese EVs and also announced a 25 percent tariff on imported steel and aluminum from China.

Given the current context, anti-discrimination measures are highly significant. For instance, US Treasury Secretary Scott Bessent in late February encouraged Canada to follow Mexico in matching US tariffs on Chinese goods as the two US neighbors sought to avoid the 25 percent US tariffs.

The MOFCOM also listed several circumstances in which anti-discrimination measures could be adjusted, suspended, or lifted, including the country or region under investigation ceases infringing on China's interests; the country or region under investigation compensates China for its losses; and the country or region under investigation and China reach consensus through consultation.

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