Sky-high Chinese tariffs block Canadian access to market

Canada’s trade deficit with China is widening amid a slowing of raw materials exports to China, while Canadians continue to import $50 billion a year of Chinese products.
Chinese tariff policy erodes Canadian export potential. Andrew Lee reports 2:53

Canada’s trade deficit with China is widening amid a slowing of raw materials exports to China, while Canadians continue to import $50 billion a year of Chinese products.

According to Industry Canada, the 2012 trade deficit with China was $31.7 billion in 2012, four times the deficit a decade ago.

Canada-China trade 2012

Chinese exports to Canada

  • Electrical machinery and equipment
  • Boilers, mechanical appliances
  • ​Furniture
  • Toys and sports equipment
  • Iron, steel articles

Canadian exports to China

  • Ores, slag and ash
  • Woodpulp, paper
  • Oilseeds, grains, fruit
  • Wood, wood articles
  • Fats, oils and waxes

And while China exports manufactured goods, like electrical machinery, furniture and footwear, to Canada, it imports mainly raw materials. Currently the top Canadian exports to China by value are wood pulp, oil seeds and grains, ores, mineral fuels and oil.

The Chinese market for Canadian-made manufactured goods is being blocked by a high tariff wall, which makes the cost of these products prohibitive for Chinese consumers.

MO851, a Montreal-based maker of luxury leather goods, has opened a boutique in Beijing, hoping to cash in on the huge Chinese consumer market with a taste for luxury goods.

A bag that retails for  $465 in Montreal, costs 90 per cent more in Beijing due to tariffs, taxes and luxury taxes.

Jim Stanford, an economist for the CAW, now part of Unifor, says the result of high tariffs is a loss of jobs to Canadians.

“It is incredibly frustrating that these policies which are very advantageous to China have really curtailed our ability to export to China,” he told CBC News.

Chinese products face no such tariffs as when they are imported to Canada, despite undercutting many Canadian-made goods.

China’s tariffs have been a key irritant in trade with the EU and North America but are allowed through China’s deal with the World Trade Organization.

For Canadian manufacturers, they can mean a bewildering welter of red tape that blocks access to the market.

One of the hopes out for the TransPacific Partnership, a trade deal currently under negotiation, is that the trading block would be powerful enough to force China to reduce its tariffs.  

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