China Imposes 76% Tariff on Canadian Canola,
Escalating Trade Tensions
Canadian Farmers Face Major Setback
as Access to Chinese Market Is Severely Restricted
Canadian Officials Express "Deep Disappointment,"
Seek Dialogue Amid Ongoing Trade Dispute
Retaliatory Tariffs Follow Canada’s Duties on Chinese EVs and Steel,
Prompting Fears of Prolonged Trade War
Tensions have escalated between China and Canada after China announced it would impose tariffs of approximately 76% on Canadian canola oil and related products.
On August 12, the Chinese Ministry of Commerce stated in an announcement that, following an anti-dumping investigation, it had determined that a surge in imports of Canadian canola had harmed China's domestic rapeseed industry. As a result, starting August 14, China will impose a 75.8% tariff on all related products, including canola seeds.
This measure is a direct blow to Canada's agricultural sector. Canola is the most valuable cash crop for Canadian farmers, and Canada has not yet resolved its trade disputes with the United States. For Canadian producers, the U.S. is the largest export market for processed canola oil and feed, while China is the largest market for canola seeds.
Canadian Minister of International Trade Maninder Sidhu and others issued a joint statement late that night, expressing that they were "deeply disappointed" by China's decision. While they refuted China's claim that Canada is dumping products in the Chinese market, they also said they are prepared to engage in dialogue with China to resolve the trade issue.
Andre Harpe, president of the Canadian Canola Growers Association, pointed out that under the new tariff structure, Canadian farmers will effectively lose access to the Chinese market. Chinese buyers are required to deposit 75.8% of the purchase amount as a cash deposit, which will only be refunded if Chinese authorities determine that the imports do not threaten domestic rapeseed growers.
Harpe stated, "Canola growers should not be on the front lines of a trade war," adding that this is the second time in six years that China has blocked Canadian canola imports. After Canada was involved in the arrest of Huawei Vice Chair Meng Wanzhou in 2019, China denied market access to major Canadian canola processors. This restriction was lifted in 2022 when Meng Wanzhou returned to China.
Harpe also expressed skepticism that retaliatory tariffs on Chinese imports would be an effective solution. Instead, he suggested that the Canadian government could support the development of new export markets or consider increasing the proportion of canola used in biofuel production.
The Wall Street Journal (WSJ) noted that China's latest retaliatory agricultural tariffs come in response to Canada imposing a 100% tariff on Chinese electric vehicles last year. Canada took this action to align with the policy direction of the Biden administration in the United States. Last month, Canada also announced tariffs on Chinese steel products and significantly reduced imports of foreign steel.
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