OTTAWA (Reuters) – Prime Minister Justin Trudeau said on Tuesday China would not bully Canada after it expelled two diplomats from 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 said “unreasonable actions” by Ottawa.

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

The feud has escalated since the arrest of Huawei Technologies CEO Meng Wanzhou in 2018 and the subsequent arrest of two Canadians in Beijing on charges of spying. All three are coming out in 2021.

Some fear that the latest increase will have economic repercussions for Canada. Chinese 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.

Beijing last year lifted a three-year ban on imports of canola, Canada’s biggest crop, from trading companies Richardson International and Vitera, imposed in 2018. China is also a big importer of potash and wheat Canadians.

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

The world supply of wheat and vegetable oils is tight due to the war in Ukraine, which could prevent China from limiting its imports of Canadian wheat and canola.

Guy Saint-Jacques, Canada’s former ambassador to China, said in an interview broadcast by Société Radio-Canada that China had “a very thoughtful response”. He said the Chinese could have reacted by expelling one or more senior officials.

Saint-Jacques also said he does not expect China to resort to economic sanctions as Beijing tries to reassure foreign companies that they can operate there after tough coronavirus restrictions are lifted. .

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

Saint-Jacques added that Beijing was launching a “witchcraft attack (to persuade) foreign companies to come back to China to invest.” So imposing sanctions on Canada at this time 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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