Canada's steel import duties violate WTO rules, says China

By Promit Mukherjee

OTTAWA (Reuters) -The Chinese embassy in Ottawa criticized duties slapped by Canada this week on Chinese imported steel, saying on Friday they violated World Trade Organization (WTO) rules and disrupted the global trade order.

The embassy statement, in response to questions from Reuters, followed an agreement between Canada and China in June to improve bilateral ties and take initial steps to rebuild their fraught trade relationship.

Prime Minister Mark Carney said on Wednesday that Canada would implement 25% tariffs on steel imports from all countries containing steel melted and poured in China before the end of July.

"Such practices violate WTO rules, disrupt the international trade order, and damage China's interests," a spokesperson at the Chinese embassy said.

Carney is trying to protect the Canadian steel industry, which had complained other countries were dumping cheap steel in Canada as a result of the 50% U.S. tariffs on imported steel imposed by President Donald Trump.

Canada already had 25% tariffs on steel and aluminum imported from China and this week tried to crack down on Chinese steel that had been further manufactured in other countries.

China was Canada's second largest trade partner with C$120 billion ($87.48 billion) of bilateral trade last year, but their ties have frayed.

"Canada's approach lacks justification in principle, has no legal basis, and will prove ineffective. It will severely undermine normal economic and trade cooperation between China and Canada," the embassy said.

Carney's office did not immediately respond to a request for comment.

Carney and Chinese Premier Li Qiang agreed last month to restart trade talks.

Canada's International Trade Minister Maninder Sidhu told Reuters in an interview on Thursday he was keen for Canadian officials to talk to Chinese counterparts "as soon as possible".

Last year Canada imposed 100% tariffs on imports of Chinese electric vehicles, squeezing their sales out of the local market.

In March, in retaliation, Beijing announced tariffs on over $2.6 billion worth of Canadian agricultural and food products.

It is conducting an antidumping investigation on Canadian canola, and had expected to issue results of the investigation by September. The embassy said the investigation could be extended for six months under special circumstances.

"If Canada cancels its discriminatory tariff measures against China, China's countermeasures can also be adjusted, suspended or canceled according to procedures," the embassy said.

($1 = 1.3717 Canadian dollars)

(Reporting by Promit Mukherjee; Editing by Caroline Stauffer, Alexandra Hudson)

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