China has announced a new preliminary anti-dumping tariff on Canadian canola imports, marking a fresh development in a yearlong trade dispute that began when Ottawa imposed tariffs on Chinese electric vehicle imports in August last year.
The provisional duty rate will be set at 75.8 percent, commencing on Thursday, as stated in the official announcement. China, being the world’s largest canola importer, heavily relies on Canada for almost all its canola supplies.
“This is a significant move. Who would be willing to pay a 75 percent deposit to import Canadian canola into China? It’s essentially a message to Canada that their canola is not required,” remarked a Singapore-based oilseed trader.
Following this announcement, China’s most active Zhengzhou rapeseed meal futures experienced a three percent decline, marking the largest daily drop since June 26.
According to China’s Ministry of Commerce, an anti-dumping investigation initiated in September 2024 revealed that Canada’s agricultural sector, particularly the canola industry, had received significant government subsidies and preferential policies.
The deadline for China to make a final decision on the duties is September, with the option to extend it by six months. A final ruling may result in a different duty rate or potentially overturn the decision made on Tuesday.
The shift in China’s stance contrasts with the conciliatory tone expressed in June, when China’s Premier Li Qiang mentioned no deep-seated conflicts of interest in a phone call with Canadian Prime Minister Mark Carney.
Canada’s trade and agriculture officials, along with the Prime Minister’s Office, have not responded immediately to requests for comments. In addition, the Canadian Embassy in Beijing has not yet commented on the matter.
The latest move by China is expected to increase pressure on the Canadian government to resolve trade disputes with China, as noted by Trivium China agriculture analyst Even Rogers Pay.
The disruption in Canadian canola exports opens up an opportunity for Australia, as analysts suggest that replacing millions of tons of Canadian canola on short notice could be challenging.
China’s decision to investigate pea starch imports from Canada also highlights ongoing trade tensions. Last year, Russia surpassed Canada as the top exporter of peas to China, with Canada and the U.S. accusing China of dumping and subsidizing pea protein exports.
In a separate development, China and the U.S. have indicated their continued negotiation on a new trade deal to avoid imposing new tariffs, which would have significantly impacted trade between the two countries.
The temporary pause maintains the current tariff rates, preventing a sharp increase that could have led to a trade standoff between China and the U.S.