Opinion: There is a real risk to Canadian exporters that China will turn its back on them as it seeks to fulfill its new commitments to the U.S.
After 18 months of stop-and-start negotiations, the U.S. and China have finally signed their so-called “Phase One” trade truce. The deal may be an important step in de-escalating the U.S.-China trade conflict but what does it mean for Canadian businesses? If China is a major export market for your business, you need to be concerned.
Under the deal, China has committed to no less than US$200 billion in additional U.S. imports by the end of 2021 . The problem for Canada is that 15 of its top 25 categories for export sales to China in 2017 are explicitly listed in the agreement, representing some 51 per cent of Canada’s total exports to China and $12 billion in value. Just as some Canadian suppliers had a windfall when China put tariffs on hundreds of billions of dollars worth of U.S.
In what was widely viewed as retaliation for Canada’s acting on a U.S. extradition request, China has already blocked all purchases of Canadian canola. The U.S.-China deal adds a further complication for Canadian canola farmers, who will now face the threat of Chinese buyers favouring U.S. suppliers.
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