A major Canadian industry faces unexpected challenges, potentially causing further disruption to the economy
Tensions are rising between Canada and China after Beijing imposed sweeping tariffs on Canadian canola last week, a development that threatens to intensify economic volatility and disrupt trade from Canada.
On Thursday, China introduced a tariff of nearly 76% on all Canadian canola imports, saying Canadian growers engaged in unfair trade practices that harmed its domestic rapeseed market. China and the United States are Canada’s two largest export markets for canola.
Prime minister Mark Carney said officials are preparing a support package for growers while pursuing discussions with Beijing. “We will advance a constructive dialogue with Chinese officials to address our respective trade concerns, while diversifying our trade abroad and supporting our canola producers at home,” he wrote on X. He also noted that “Canada does not dump canola.”
Carney said he had spoken with Saskatchewan premier Scott Moe and confirmed the federal and provincial governments were focused on measures to help farmers. The Chinese tariffs would cause significant hardship for western Canadian farmers, as canola is their biggest cash crop, Carney said, according to The Wall Street Journal.
The Chinese embassy in Ottawa has not yet commented on the matter.
Trade measures behind the dispute
The canola tariffs follow Canada’s move in 2024 to impose a 100% tariff on Chinese-made electric vehicles in alignment with US policy. Last month, Canada also announced new restrictions on steel imports, including a 25% surtax on products containing steel melted or poured in China.
Carney said at the time that certain foreign competition “unfairly benefits” from non-market policies, such as exporting products at lower prices than those charged domestically.
China responds through WTO
Beijing has taken its case to the World Trade Organization (WTO). The Chinese commerce ministry said Canada’s measures are “discriminatory” and amount to “a prototypical measure reflecting unilateralism and protectionism, which damages China’s legal rights and disrupts the global stability of steel product supply chains.”
China urged Canada “to correct its erroneous actions” while also expressing disappointment at the tariffs.
International trade lawyer Lawrence Herman told The Canadian Press the WTO filing is a “cynical ploy.” He argued China often offends “the very basis of the WTO agreement” through state capitalism and subsidized exports, while restricting foreign companies’ access to its market.
Expanding trade tensions
The latest moves expand a series of disputes that began with vehicles and steel and now extend into agriculture. Canada’s actions included quotas and higher tariffs on steel, while China has threatened countermeasures and moved against Canadian canola.
For Canada, the outcome could have wide implications for two industries that rely on global markets.
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