Canadian grain farmers are in trouble and federal policies are to blame.
Tariffs on a key grain export Canada sends to China has sent the industry into crisis mode.
Back in March, China placed a 100 per cent tariff on Canadian canola oil and meal imports, which primarily targeted processors and exporters.
This month, China went further and placed a 75.8 per cent provisional anti-dumping duty on Canadian canola seed, which has effectively shut out Canadian raw canola seed exports from China, by far the industry’s biggest customer.
China’s tariffs on Canada’s farmers didn’t just happen randomly. They are part of an act of retaliation. Even before China placed its first tariff on Canadian canola, the Trudeau government placed a brand-new 100 per cent tariff on Chinese electric vehicles, on top of a six per cent tariff that was already in place.
Alongside this new tariff, the federal government also placed a 25 per cent tariff on Chinese steel and aluminium, making bilateral trade even more difficult.
These twin blows Canada struck against China didn’t go unnoticed. The result was the Chinese government seeking to retaliate in a way that has brought Canada’s canola industry to its knees.
Observers shouldn’t be surprised that China would retaliate against Canada in the face of high tariffs imposed on key industries. The official justification for the tariffs from the Trudeau government was that China has an “unfair advantage in the global marketplace” resulting from China’s overcapacity and oversupply of electric vehicles.
Essentially, the feds decided to punish China for making cheaper electric vehicles and sought to stand in the way of Canadian consumers possibly wanting to buy them.
The Trudeau government poured billions of dollars of taxpayer money into the domestic electric vehicle industry, so it’s no surprise that the feds would want to try to get consumers to buy electric cars produced in Canada.
In addition, the Trudeau government passed legislation that forces all new light-duty vehicles sold in Canada beginning in 2035 to be electric, in an attempt to try to force Canadian consumers to buy electric cars. Again, by blocking Chinese competition from being desirable, and by forcing consumers to buy electric cars if they want to buy new vehicles, the feds are trying to force Canadian consumers to buy a certain type of electric car.
When it comes to canola, the federal government is criticizing the Chinese government for being protectionist. But when it comes to electric vehicles, the feds are doing the exact same thing they’re accusing China of.
Yes, it is true that there are security concerns with Chinese electric vehicles. However, the federal government didn’t even use this rationale for its tariffs. Security concerns are a valid issue, and those concerns should be shared with consumers. But should the federal government block Canadian consumers entirely from being able to purchase Chinese electric cars by imposing a 100 per cent tariff and using an alternative justification for it?
That hardly seems like treating Canadians like adults.
At the same time, Canadians buy lots of things from China and millions of Canadians even use Chinese-based apps on their smartphones like TikTok. If consumers have concerns about security when it comes to Chinese cars or Chinese apps, they shouldn’t buy or download them. But Canadians deserve the freedom of choice.
To decry the Chinese government’s protectionism while engaging in protectionism of its own is a move on the part of the federal government that the canola industry cannot afford. With the Canadian economy already suffering because of the trade conflict with the United States and other economic realities, allowing a key Canadian industry like farming to be saddled with crippling tariffs will only make things worse.
The feds ought to open negotiations with China and propose that both sides put aside their protectionism. When it comes to electric vehicles, the ultimate choice should be made by consumers, not the government. And farmers shouldn’t be forced to get hurt in the process while the feds shield a favoured industry from real competition.
Originally published here