Trade Minister Warned About China’s ‘Economic Coercion’ in Briefing by Global Affairs

Aug 30, 2025 - 09:56

Updated: 12 months ago

Trade Minister Warned About China’s ‘Economic Coercion’ in Briefing by Global Affairs

Upon assuming the role in March, International Trade Minister Maninder Sidhu was briefed by Global Affairs on Canada’s efforts to diversify away from China, citing Beijing’s “economic coercion” and “pervasive” non-market practices, according to recently released documents.

Sidhu was informed in a briefing book detailing his mandate and responsibilities that Canada’s trade commissioner services “have focused on diversifying away from China, into the broader Indo-Pacific,” noting that trade with Beijing in certain sectors is risky and requires “caution,” as first reported by Blacklock’s Reporter.

The document, provided to the minister in March and published in July, contrasts sharply with Canada’s position some years ago, when it was exploring a free trade agreement with Beijing.

“China also leverages its dominant market position in strategic sectors to advance its policy goals, including through the leveraging of trade dependencies in import and exports and where it holds a critical place in global supply chains,” reads the document.

“Canada has been the target of China’s economic coercion, where our domestic canola industry was targeted between 2019 and 2022 amid the Two-Michaels/Meng Wanzhou affair.”

The document also warns against China’s “pervasive” use of unfair or non-market practices, such as “subsidization, forced technology transfers, and insufficient labour standards (forced labour) and environmental standards,” which Ottawa says has created global market distortions.

Ottawa’s citing of the canola industry as an example of Beijing’s “economic coercion” stems from Canada’s growing dependence on the Chinese market, its second-largest destination for canola exports after the United States, with total exports last year valued at nearly $5 billion.

Beijing has on various occasions targeted that industry during periods of diplomatic or trade tension with Ottawa.

In 2019, Beijing imposed a three-year ban on Canadian canola imports following the arrest of Huawei executive Meng Wanzhou in Vancouver just months earlier. Her arrest was also followed by the detention of Canadians Michael Kovrig and Michael Spavor, who were held in China for more than 1,000 days in what was widely seen as Beijing’s retaliation.

More recently, Beijing has twice targeted Canada’s canola industry with tariffs this year, amid ongoing trade disputes with Ottawa.

In March, China announced 100 tariffs on Canadian canola oil and oil cakes, as well as duties on other agricultural imports. The tariffs came at a time when Canada was grappling with U.S. tariff tensions, and months after Canada, citing “unfair” competition from Chinese producers, imposed 100 percent tariffs on Chinese-made electric vehicles and 25 percent tariffs on Chinese aluminum and steel products.

Then, China imposed 75.8 percent temporary tariffs on Canadian canola last month, following Ottawa’s decision weeks earlier to impose 25 percent tariffs on steel imports from all non-U.S. countries containing steel melted and poured in China to protect Canada’s domestic industry.

China has filed a complaint to the World Trade Organization (WTO) over Ottawa’s latest tariffs.

In response to China’s WTO complaint, Minister Sidhu’s office has defended the measures, saying that Chinese overcapacity is undermining Canada’s steel sector and putting Canadian jobs at risk.

The March briefing document to Sidhu says his role as international trade minister is to navigate three primary challenges, including “protecting economic security from risks, including economic coercion and non-market trading practices.” The other two challenges involve Canada-U.S. trade and advancing export diversification.

The document notes that while China remains an “important export destination” because of its market size, it is a “challenging” environment for Canadian businesses due to issues like investment restrictions, intellectual property theft, and the use of forced labour.

It adds that China relies on strong imports to compensate for challenges to its economy, such as an aging population, weak real estate and labour markets, and low domestic consumption.

Commenting on Canada’s response to the latest canola tariffs, the prime minister’s parliamentary secretary, Kody Blois, said last week that Canada would seek to work with Beijing to restore market access, while continuing its efforts to diversify exports.

The Canadian Press contributed to this report.