Prime Minister Trudeau said Canada will not be intimidated by Chinese retaliation

OTTAWA (Reuters) – Prime Minister Justin Trudeau said on Tuesday that China will not intimidate Canada after expelling two diplomats by Ottawa and Beijing.

Ottawa expelled Chinese diplomat Zhao Wei on Monday over allegations of foreign interference, and hours later China asked a Canadian diplomat in Shanghai to leave by May 13 in response to what it called Ottawa’s “unreasonable actions”.

“We understand there will be retaliation, but we will not be afraid, and we will continue to do whatever is necessary to protect Canadians from foreign interference,” Trudeau told reporters in Ottawa.

The row has raged since the arrest of Huawei Technologies CEO Meng Wanzhou in 2018 and Beijing’s subsequent arrest of two Canadians on espionage charges. All three are released in 2021.

Some fear the latest escalation could have economic repercussions for Canada. China’s imports of Canadian goods rose 16% last year to a record C$100 billion ($74.8 billion), and China is Canada’s second largest trading partner after the United States.

Last year, Beijing lifted a three-year ban on imports of canola, Canada’s largest crop, from trading firms Richardson International and Vitera that had been imposed in 2018. China is also a major importer of Canadian potash and wheat.

“With China, there is always a risk of retaliation,” said Tyler McCann, managing director of the Canadian Agri-Food Policy Institute. “(But) the Chinese government appears to be more sensitive to food security than it was years ago, and that may mitigate the risks.”

Global supplies of wheat and vegetable oils are tight due to the Ukraine war, which could make it difficult for China to limit imports of Canadian wheat and canola.

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Guy Saint-Jacques, the former Canadian ambassador to China, said in an interview broadcast by the Canadian Broadcasting Corporation that China had “a very thoughtful response.” He said the Chinese could have responded by expelling one or more senior officials.

Saint-Jacques also said he did not expect China to resort to economic sanctions because Beijing is trying to reassure foreign companies that they can operate there after the removal of strict restrictions related to COVID-19.

This year Beijing rolled out the red carpet for Western leaders including French President Emmanuel Macron, and Chinese Prime Minister Li Qiang reached out to corporate leaders to ensure the country was now open for business.

Saint-Jacques added that Beijing was launching a “witchcraft attack (to persuade) foreign companies to return to China to invest.” So imposing sanctions on Canada at this point would have sent a very bad message to foreign companies.”

($1 = 1.3372 Canadian dollars)

(Reporting by Ismail Shakil in Ottawa)

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