The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) has agreed to establish two new dispute panels to review Canadian surtaxes and Chinese duties on farm and fish products.
In a statement, the DSB said that at the request of China, a panel will examine surtax measures imposed by Canada on certain products of Chinese origin, including electric vehicles and steel and aluminium products. The DSB also created a panel an the request of Canada to review additional import duties imposed by China on certain Canadian agricultural and fisheries products.
China submitted its second request for the establishment of a dispute panel with respect to the surtax measures imposed by Canada on certain products of Chinese origin, including electric vehicles and steel and aluminium products. Canada had said it was not ready to accept China’s first request for the panel at a DSB meeting on May 23, 2025.
China said it considers Canada’s measures inconsistent with provisions of the General Agreement on Tariffs and Trade (GATT). It added that it was open to constructive discussions and remains committed to resolving the dispute.
The DSB said it is unfortunate that China has included in its panel request claims related to certain solar products, critical minerals, semiconductors, permanent magnets and natural graphite imported from China, Canada said, noting that there are no Canadian surtax measures on these products. China has therefore failed to identify the specific measures at issue as required under the Dispute Settlement Understanding (DSU), Canada said.
Canada said its surtax measures on electric vehicles and steel and aluminium products are justified under the GATT and that it was fully prepared to defend these measures. Canada remains committed to maintaining constructive dialogue with China even as the dispute moves to the panel stage, it added.
The United States said that China responded to the surtaxes by imposing countermeasures in the form of additional duties on Canadian agricultural and fishery products.
The DSB agreed to the establishment of the panel.
Australia, the European Union, India, Japan, the Republic of Korea, Malaysia, Norway, the Russian Federation, Singapore, Switzerland, Türkiye, the United Kingdom, Ukraine and the United States reserved their third-party rights to participate in the proceedings.
For its part, Canada submitted its second request for the establishment of a dispute panel with respect to the additional import duties imposed by China on certain Canadian agricultural and fisheries products. China had said it was not ready to accept Canada’s first request for the panel at a special DSB meeting on June 5, 2025.
Canada said the import duties imposed by China represented a unilateral determination and trade countermeasures contrary to WTO rules. Canada moreover said that as the dispute concerns perishable goods, the case should be treated as urgent as provided by the DSU. Canada remains committed to maintaining constructive dialogue with China even as the dispute moves to the panel stage, it added.
China replied that it regretted Canada’s decision to seek the establishment of a panel and opposed Canada’s claim that DSU provisions on urgency apply to this case. China said it will defend itself in the proceedings and is confident that its measures will be found consistent with WTO rules. It added that it remained open to engagement with Canada.
The United States reiterated that the measures at issue are countermeasures imposed by China in response to Canadian measures China is challenging in DS627. The DSB agreed to the establishment of the panel.
Australia, the European Union, India, Japan, Norway, the Russian Federation, Singapore, Switzerland, Türkiye, the United Kingdom, the United States and Viet Nam reserved their third-party rights to participate in the proceedings.
