China would be open to free-trade talks with Canada, Beijing’s envoy says

7 comments

1. China’s ambassador to Canada, Wang Di, has expressed interest in increasing trade with Ottawa, despite recent tense relations. Wang warned that the US should not force Canada to choose between the two countries, as this would further destabilize the global economy. China is willing to consider a free-trade deal with Canada, but only if Ottawa lifts restrictions on Chinese trade, including those implemented for national security reasons. Recent trade restrictions imposed by Canada on Chinese goods, including a 100% tariff on electric vehicles, have triggered retaliatory tariffs from China on Canadian agricultural exports, such as canola and pork.

2. Chinese support in Canada is already really low, with the tariffs, executed Canadian citizens, and interference in Canadian elections, support for China is very low and would stay that way.

   The most likely things that would happen are either
   1. More lax rules for Chinese students studying in Canada (basically bypassing restrictions)

   2. Increased imports of Chinese consumer products, similar to what we see in Australia.

   3. Slightly increased exports of Canadian resources (although most of Canada’s exported goods can be sourced from Russia and Australia for cheaper)

   Other than these things, from what I can tell, the Canadian government would prefer to keep China’s influence in Canada to a minimum, instead focusing on EU trade to supplement the loss in US trade.

3. Thanks, but no thanks.

   Canada already buys twice as much from China as China buys from Canada, in spite of having an economy that is only 12% the size of China’s. This would just make the trade imbalance much worse, especially since China’s growth strategy is to maximize exports and minimize imports. There is in fact no such thing as “free trade” with China.

   Worse, Canada would have to surrender all tools for managing market access, starting with lifting tariffs on Chinese EVs, which will result in China destroying the Canadian automotive industry through dumping in short order, furthering the CCP’s objective of cornering global manufacturing by destroying foreign competition.

   All for the privilege of running an even larger trade deficit.

   Hard pass.

4. This rhetoric costs China absolutely nothing, while it will increase the amount of effort the US will need to invest in Canada to at least some degree.

   (Incidentally it was fear of the Irish Free State developing long-term economic relations with Germany instead of the UK that was one of the contributing factors to Nelson Chamberlain’s government seeking to settle the Anglo-Irish Trade War quickly on terms favourable to Dublin)

5. Translation: “The US sucks so let us dump products on your already strained domestic market.”

6. could be a lucrative deal for Canada, but the problem is Canada’s proximity to US and its geo-strategic value means it can never truly escape America’s orbit in any meaningful way.

   China will likely never develop any lasting EV or green-tech partnership with Canada; even shared research partnerships would be immensely difficult to draft. Any free-trade deal will likely revolve around raw resources extraction and denying access to American industries.

   Still worth a discussion (because you never truly know unless you try), but its very unlikely given the current economic climate.

7. Smart for both countries to do this

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