China's Ministry of Commerce (MOFCOM) has announced substantial measures against Canada in response to the imposition of hefty additional tariffs on Chinese products, including electric vehicles (EVs), steel, and aluminum. The MOFCOM plans to launch an anti-discriminatory probe and initiate dispute settlement proceedings at the World Trade Organization (WTO) in accordance with Chinese laws, regulations, and WTO rules.

China has criticized Canada's decision, which aligns with the United States and the European Union (EU), denouncing it as a violation of WTO rules and deemed it to be egregious in nature. To safeguard the interests of Chinese industries, China will initiate a dispute settlement procedure at the WTO regarding Canada's imposed tariffs on Chinese EVs and other products.

In addition, China will conduct an anti-discriminatory investigation into Canada's implementation of additional tariffs on Chinese EVs, steel, and aluminum, under Article 7 and Article 36 of China's Foreign Trade Law. Article 7 clearly stipulates that China has the right to take appropriate measures against any country or region that applies discriminatory trade measures. Meanwhile, Article 36 authorizes the authority responsible for foreign trade under the State Council to conduct investigations related to these matters.

The MOFCOM has stated that subsequent measures will be taken based on the actual situation. Experts have highlighted that this anti-discriminatory probe is the first of its kind and aligns with both Chinese laws and WTO regulations.

China has also announced an anti-dumping investigation into canola seeds imported from Canada, with the intention of safeguarding the legitimate rights and interests of domestic enterprises. The MOFCOM highlighted that in 2023, Canada's exports of canola seeds to China reached $3.47 billion, representing a significant 170 percent year-on-year increase, despite continuous price drops. The imposition of unfair competition by Canada has led to losses for Chinese domestic industries. Furthermore, China plans to launch an anti-dumping probe into relevant chemical products from Canada.

The MOFCOM firmly stated that China will take all necessary measures to defend the legitimate rights and interests of Chinese companies. Unlike Canada's politically motivated actions that fall outside the WTO framework, China's measures are a response to industry concerns and requests, firmly rooted in WTO rules and Chinese laws and regulations.

Canada's decision to impose a 100 percent tariff on Chinese EV imports, following the footsteps of the US and the EU, has triggered concern within the industry. The potential disruption to the supply chain and businesses, including foreign companies like Tesla, has caused alarm. Although the volume of Chinese EV exports to Canada was relatively small until recently, with the rise in shipments of Shanghai-made EVs, the value surged to C$2.2 billion ($1.6 billion) in 2023, compared to C$100 million in 2022.

Chinese officials have harshly criticized Canada's politically motivated move, vowing to safeguard the legitimate rights and interests of Chinese enterprises. The China Iron and Steel Association has expressed serious concerns over Canada's unilateral decision to impose tariffs on Chinese steel products without conducting any investigation. They assert that such actions undermine the multilateral trading system based on WTO rules and have a detrimental impact on global steel trade and industry development.