China retaliates with anti-dumping probe after Canada's 100% EV tariffs

China has said it would launch an anti-dumping probe into Canadian canola and chemical products, in apparent retaliation for Ottawa's new restrictions on imports of Chinese electric vehicles (EVs).

Its commerce ministry said in an online statement on Tuesday that it "will initiate an anti-dumping investigation into canola imported from Canada, in accordance with the law".

The ministry said domestic industries had recently reported that Canadian canola exports to China "have increased significantly", reaching US$3.47 billion in 2023 while prices "have continued to fall".

It said Canadian exporters were "suspected of dumping" products into the Chinese market, adding that "China's domestic canola-related industries have continued to incur losses under the influence of unfair competition by the Canadian side".

Last month, Canadian Prime Minister Justin Trudeau announced tariffs of 100 percent on Chinese EVs, accusing Beijing of "not playing by the same rules as other countries" in areas like environmental and labour standards.

The United States and the European Union have also respectively slapped tariffs of 100 percent and 36 percent on Chinese EVs, arguing that Beijing unfairly subsidises domestic producers whose products then flood foreign markets and undercut local competitors.

China has repeatedly criticised the imposition of levies and launched a series of its own investigations in response.

Tuesday's statement also said Beijing was "strongly dissatisfied and resolutely opposed" to the Canadian tariffs and planned to raise the issue with the World Trade Organization's dispute resolution mechanism.

Canadian chemical products

China would also launch a similar probe into "relevant Canadian chemical products, based on applications by domestic industries", according to the ministry.

"China... will take all necessary measures to defend the legitimate rights and interests of its enterprises," it said.

Ottawa's EV surtax, on top of existing import duties of 6.1 percent, will be imposed from October 1.

It will target Chinese electric and certain hybrid passenger automobiles, trucks, buses and delivery vans.

Canada will also limit eligibility for EV incentives to those made in countries with which Canada has free trade deals, which would exclude China.

A separate surtax on imports of steel and aluminium products from China will be effective from October 15.

The two countries have in recent years have butted heads over a range of issues from trade and technology to human rights.

Bilateral ties plunged into the deep freeze for several years from 2018, when Canada detained a top executive from Chinese tech giant Huawei, prompting Beijing to arrest two Canadian nationals in retaliation.