Volkswacht Bodensee - China, Canada leaders hold first formal talks since 2017

Canada's relations with China are among the worst of any Western nation but both are at the sharp end of Donald Trump's tariff onslaught, even after Xi and the US leader's deal Thursday to dial back tensions.

Ties fell into a deep freeze in 2018 after the arrest of a senior Chinese telecom executive on a US warrant in Vancouver and China's retaliatory detention of two Canadians on espionage charges.

In July, Carney announced an additional 25 percent tariff on steel imports that contain steel melted and poured in China.

Beijing announced the following month it would impose a painful temporary customs duty of 75.8 percent on Canadian canola imports.

Canada is among the world's top producers of canola, an oilseed crop that is used to make cooking oil, animal meal and biodiesel fuel.

But Canada and China have both been heavily targeted by Trump's global trade onslaught.

Trump said on Thursday he would halve fentanyl-related tariffs on China to 10 percent while Xi agreed to keep rare earths flowing and boost imports of US soybeans.

But the average US tariff on Chinese imports remains at 47 percent, Trump said.

The US president on Saturday said he was hiking tariffs on Canadian goods by an additional 10 percent and terminated all trade talks.

This followed what Trump called a "fake" anti-tariff ad campaign that featured the late ex-president Ronald Reagan.

"(The) old world of steady expansion of rules-based liberalised trade and investment, a world on which so much of our nations' prosperity -- very much Canada's included -- (is based), that world is gone," Carney told the APEC gathering.

- Japan -

Later Xi was also due later to meet Japan's first woman premier, Sanae Takaichi, for the first time.

The regular visitor to the flashpoint Yasukuni shrine honouring Japan's war dead is seen as a China hawk, although recently she has toned down her remarks.

But in her first policy address last Friday, she still declared that the military activities of China -- and North Korea and Russia -- "have become a grave concern".

She announced that Japan would be spending two percent of gross domestic product on defence this fiscal year -- two years ahead of schedule.

China responded by saying that there were "serious doubts among (Japan's) Asian neighbours and the international community about whether Japan is truly committed to an exclusively defensive posture and the path of peaceful development".

On Trump's visit to Japan on his way to Busan, Takaichi spoke alongside the US leader aboard a US aircraft carrier and said her country faces "unprecedented" security dangers.

She is also a strong backer of Taiwan and backs security cooperation with the self-ruled island.

Japanese media said that Takaichi was expected to convey to Xi grave concerns over China's behaviour, including around the Senkaku Islands, known as the Diaoyu Islands by China.

She was also expected to press for the early release of Japanese citizens detained in China and request that the safety of Japanese expatriates in China be ensured, the reports said.

Japanese industry is also keen to ensure that supplies of rare earths from China -- which have become a football in Xi's trade tussle with Trump -- keep flowing.

"It could be a frosty get-to-know-you meeting as Xi Jinping has not sent a congratulatory message to Takaichi, wary of her reputation as a China hawk," Yee Kuang Heng, a professor at the University of Tokyo's Graduate School of Public Policy, told AFP.

"Overall though, stability is a shared priority and both sides will probably stick to the broad mantra established over the past few years of working towards a 'mutually beneficial relationship based on common strategic interests'," Heng said.

W.Huber--VB