China has announced a preliminary anti-dumping duty of 75.8% on Canadian canola imports, escalating a trade dispute that began when Ottawa placed tariffs on Chinese electric vehicles last year. The duty, which takes effect Thursday, follows a nearly yearlong investigation by China’s Ministry of Commerce, which alleges Canada’s canola sector has received significant subsidies and preferential policies.
As the world’s largest canola importer — and a key buyer of Canadian crops — China’s move could disrupt a $5-billion trade relationship. Some traders say the tariff is effectively a market shutdown for Canadian exporters. Rapeseed meal futures in China fell 3% after the announcement, their biggest one-day drop since June.
The decision contrasts with a more conciliatory tone struck in June, when Chinese Premier Li Qiang told Prime Minister Mark Carney there were “no fundamental conflicts” between the two countries. A final ruling is due in September, though officials could extend the deadline or adjust the rate.
The impact may open the door for Australian canola to regain market share after years of strained ties with Beijing, but analysts say replacing Canada’s supply entirely will be difficult. Adding to tensions, China has also launched a yearlong anti-dumping probe into Canadian pea starch, a sector where Canada’s market share has already fallen sharply, with Russia now the leading supplier.
These measures place new pressure on Ottawa to manage deteriorating relations with Beijing, even as China and the United States maintain a fragile trade truce. While the U.S.–China pause has avoided further tariff escalation, Canada now faces the prospect of prolonged agricultural strain with its second-largest trading partner.