Canada has walked itself into an unnecessary trade war with the United States’ biggest geopolitical rival, China.
The consequences are now clear: new retaliatory tariffs from China directly target our farmers, affecting over $3 billion in agri-food commodities and products. These measures are a direct response to Canada’s decision to impose a 100 per cent tariff on Chinese electric vehicles (EVs) back in October—a move designed to align with U.S. trade policy and shield the North American auto sector from low-cost competition.
But now, the landscape has shifted: Joe Biden is no longer in office, Donald Trump is signalling hostility toward Canada, and China is retaliating against Canadian farmers. Meanwhile, the United States is also taking an aggressive stance against Canada, unprovoked, further complicating trade relations.
Canada has been in this position before. During the Huawei affair in 2018, China employed similar tactics. When Meng Wanzhou, a top Huawei executive, was arrested in Vancouver, China swiftly imposed restrictions on Canadian canola, pork and other agricultural exports. China’s geopolitical strategy is calculated and effective, targeting industries that generate maximum pressure on the Canadian government. By contrast, Canada’s trade policy is often reactionary, driven by optics rather than strategic, long-term planning.
Now, China is once again sending a clear message by targeting Canadian farmers in retaliation for an EV tariff — even though Canada has yet to import a single Chinese-made electric vehicle. This comes at the same time that Canada installs a new prime minister to replace Justin Trudeau, the leader who originally imposed the EV tariffs. The symbolism is undeniable, yet it remains unclear whether Ottawa grasps its significance.
At the heart of this issue is Canada’s flawed strategy on EVs—a policy that mirrors the protectionist nature of supply management in the dairy sector. The federal government has poured over $50 billion into the EV and battery industries, supporting domestic manufacturing, critical minerals and supply chain development. Beneficiaries include Volkswagen, Stellantis-LG Energy Solution, Northvolt and Honda, among others.
To protect these investments, Ottawa followed the U.S. lead in imposing tariffs on Chinese EVs, effectively limiting market competition and driving up domestic EV prices over time.
This raises an important question: if the Canadian government is still serious about climate action, shouldn’t it prioritize making EVs more affordable rather than blocking cheaper imports? Instead, Ottawa has chosen to prioritize jobs in the auto sector over environmental concerns. The inconsistency is staggering.
Meanwhile, the EV and battery industries that Canada is trying to protect remain in their infancy. We are not importing Chinese EVs, yet our agricultural sector is bearing the cost of this policy misstep.
To put the misallocation of funds into perspective, let’s consider what else could have been achieved with the $50 billion funnelled into EVs and batteries. The beef sector, a vital component of Canada’s food security, offers a compelling case study.
With $50 billion, the meatpacking industry could be revolutionized. A mid-sized meatpacking plant costs roughly $200 million to build, meaning these funds could support the construction of approximately 250 plants, each capable of processing between 500 and 2,000 cattle per day.
Alternatively, large-scale industrial plants, like those operated by Cargill and JBS, typically cost $800 million each, meaning this investment could fund around 62 massive facilities, each capable of handling 4,000 to 7,000 cattle daily. For context, Cargill’s High River plant processes 4,000 cattle per day, while JBS’s Greeley facility in the U.S. handles about 5,000. This level of investment would decentralize the North American meat supply chain, increase competition and improve food security by reducing reliance on a handful of dominant processors.
The lack of foresight in Ottawa’s trade and industrial policies is astonishing. If a country controls its food supply, it holds far greater economic and strategic leverage. China understands this well. The question now is whether Canada’s next government will learn the lesson before more damage is done to our farming sector.
Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.
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