China has imposed an initial anti-dumping tariff on Canadian canola imports, marking a new development in a yearlong trade conflict that began when Ottawa imposed tariffs on Chinese electric vehicle imports last August. The provisional duty rate of 75.8% will come into effect on Thursday, according to an official statement.
Being the world’s largest importer of canola, China heavily relies on Canada for its canola supply. The announcement of the steep deposit requirement drew reactions from market players, with one oilseed trader in Singapore expressing concerns over the practicality of paying such a high fee for importing Canadian canola into China.
Following an anti-dumping investigation initiated in September 2024, China’s Ministry of Commerce found that Canada’s agricultural sector, specifically the canola industry, had benefitted from significant government subsidies and preferential policies. The investigation is set to conclude in September, giving China time to finalize its decision on the duties, with the option to extend the deadline by six months.
The recent policy shift signifies a departure from the previously conciliatory tone observed in June, when China’s Premier Li Qiang downplayed significant conflicts of interest between the two nations during a discussion with Canadian Prime Minister Mark Carney. Officials from Canada, including the trade and agriculture ministers and the Prime Minister’s Office, have not yet responded to requests for comments.
The move by China is expected to intensify pressure on Canada to address trade disputes between the two countries. Analysts suggest that replacing the substantial volume of Canadian canola imports at short notice may pose challenges. This situation presents an opportunity for Australia to potentially regain access to the Chinese market, which it lost due to regulatory restrictions related to fungal plant disease.
In a separate development, China has initiated an anti-dumping probe on pea starch imports from Canada, which is set to last a year and could be extended. This investigation comes amid shifting market dynamics, with Russia surpassing Canada as the top pea exporter to China in recent years. Both Canada and the U.S. have accused China of dumping and subsidizing pea protein exports to North America.
Meanwhile, China and the U.S. have signaled their commitment to ongoing negotiations for a new trade deal, averting a scenario where new tariffs would have escalated sharply on both sides. This pause maintains the current tariff levels between the two countries, preventing a potential trade embargo.