CHINA THREATENS CANADA OVER STEEL IMPORT CURBS — TRADE TENSIONS ESCALATE
China has strongly condemned Canada’s recent steel import restrictions and has issued a warning of potential retaliatory measures. The diplomatic friction comes after the Canadian government implemented new curbs to limit steel imports, citing concerns over dumping and trade diversion following recent U.S. tariff hikes on global steel products.
On July 16, 2025, Canada introduced a tariff-rate quota system aimed at capping steel imports from countries with which it has free trade agreements (excluding the U.S.). Imports above certain thresholds would be subject to a 50% surcharge. More notably, the government announced an upcoming 25% surtax on all imports that contain Chinese-origin steel, even if processed in third countries. This policy is scheduled to take effect by the end of July.
In response, China’s Ministry of Commerce (MOFCOM) expressed “strong dissatisfaction and firm opposition”, calling the move unilateral, discriminatory, and in violation of World Trade Organization (WTO) principles. The ministry emphasized that the restrictions are unreasonable and politically motivated, alleging that Canada is following the lead of the United States rather than acting based on fair trade principles.
Chinese officials argued that Canada is using the U.S.’s aggressive tariff stance as an excuse to target China unfairly. According to a statement released by MOFCOM, “Canada is imposing unjustified barriers under the pretext of protecting domestic industry, thereby distorting the global steel market and breaching WTO obligations.”
China further warned that it “reserves the right to take all necessary countermeasures”, suggesting possible trade retaliation against Canadian exports. Potential targets may include agricultural goods such as pork, canola, and seafood—sectors in which Canada is heavily reliant on Chinese markets.
This latest development adds fuel to a growing trade dispute between the two nations. In late 2024, Canada imposed 100% tariffs on Chinese electric vehicles and introduced steel and aluminum duties due to national security concerns. In retaliation, China raised tariffs on Canadian agricultural exports in March 2025 and filed a formal complaint with the WTO.
Canadian Trade Minister Mary Ng defended the new steel policy, stating it is necessary to prevent a surge of diverted steel into the Canadian market, particularly from Chinese mills affected by the U.S. tariffs. She emphasized that Canada remains open to dialogue but must prioritize the integrity of its manufacturing sector and the jobs it supports.
Trade analysts note that this standoff could worsen economic conditions for both countries, particularly Canada, whose exports are vulnerable to Chinese retaliation. The situation also underscores the challenges facing the multilateral trade system, as WTO rules come under increasing strain from unilateral trade actions.
As tensions mount, both nations are being urged by international observers to engage in constructive talks to avoid a deeper rift. The outcome of this dispute may also shape how other countries react to rising protectionism in global trade.
In summary, China’s threat marks a serious escalation in its ongoing trade conflict with Canada, raising the stakes for industries on both sides and putting pressure on diplomatic and economic ties already strained by earlier disputes.