Caught in the US-China Fight: Canada Hit with Tariff Bombs

US Imposes 250% Tariffs on Lumber and Dairy Products

China Imposes up to 100% on Agricultural and Fishery Products

The United States and China have successively launched tariff bombs on Canada. US President Donald Trump announced that he would impose 250% tariffs on Canadian lumber and dairy products just one day after declaring a tariff exemption for Canadian products. Subsequently, China also announced additional tariffs of 25-100% on certain Canadian agricultural, livestock, and fishery products. Canada has found itself caught in a tariff war between the US and China, who are already embroiled in their own trade conflict.

On the 8th, China announced that it would impose additional tariffs of 25-100% on Canadian agricultural products and food items starting from the 20th. The Customs Tariff Commission of China's State Council stated, "With the approval of the State Council, we will impose an additional 100% tariff on Canadian rapeseed oil, oil residue cake, and peas starting from the 20th." They also decided to impose an additional 25% tariff on Canadian fishery products and pork. This is a retaliatory measure in response to Canada's application of a 100% additional tariff on Chinese electric vehicles from October 1 last year, and a 25% tariff on Chinese steel and aluminum products from October 22.

China defined this measure as being in accordance with its 'Anti-Discrimination Law.' This law allows China to take corresponding measures when a country or region imposes discriminatory prohibitions or restrictions against China in terms of trade.

President Trump claimed at the White House on the 7th, "Canada has been exploiting us for years in lumber and dairy products." He added, "Canada imposes tariffs of up to 250% on US dairy products and extremely high tariffs on lumber," and stated that "we will impose the same tariffs reciprocally." This announcement came just one day after President Trump decided to exempt imports from Mexico and Canada from the '25% tariff' until the 2nd of next month.

The dairy dispute between the US and Canada has been ongoing for a long time. Canada imposes tariffs of up to 241% to protect its domestic dairy farmers. However, these are applied only when US products exceed a certain export volume to defend prices. The US already imposes 14.5% anti-dumping and countervailing duties on Canadian softwood lumber.

Some interpret Trump's mention of reciprocal tariffs against Canada just one day after announcing tariff exemptions for Mexico and Canada as being due to his conflict with Canadian Prime Minister Justin Trudeau.

Reporter Kim Dong-hyun 3code@hankyung.com