China has significantly intensified its trade war with Canada by implementing a 75.8% anti-dumping duty on Canadian canola seed (a.k.a. rapeseed) that starts today.

This latest action comes after China’s imposition of a 100% tariff on Canadian canola oil and cake/meal in March. The earlier move also included a 100% tariff on peas and a 25% tariff on pork and seafood products from Canada.

Although replacing Canadian imports will be difficult, the duty and tariff raise the price of the Canadian canola so high that they effectively block it from the Chinese market. The timing of the new duty on seed is particularly bad as it comes just before this year’s canola harvest.

The reason given by the Chinese government for the tariff on canola oil and cake was the levy on Chinese electric vehicles and steel and aluminum products that Canada imposed last fall.*

The justification for the duty on canola seed is the finding of an anti-dumping probe launched by China in September 2024 that “Canada's agricultural sector—particularly the canola industry—had benefited from substantial government subsidies and preferential policies.” In a statement released on Tuesday, the federal government denies any wrongdoing by Canada.

As we noted in March when the tariffs on Canadian agricultural products were announced, the dollars involved are significant:

• Canada exported $14.6 billion worth of canola seed and oil/meal last year with almost $5 billion (34%) going to China. Canada’s largest buyer was the U.S. at 53% of the total.
• Alberta exported $4.3 billion worth of canola seed and oil/meal last year with $1.6 billion (36%) going to China. As with the country as a whole, the U.S. was Alberta’s largest customer at 52% of total international sales in 2024.
• A quarter of Alberta’s total international agricultural exports in 2024 were canola seed and oil/meal—the second largest share after Saskatchewan (see the chart below).

Having to scramble to find alternative buyers will likely put downward pressure on Canadian canola prices and create significant stress for producers.

Hopefully, a resolution to the trade conflict will be forthcoming soon, but there is no clear sense of when or how this will happen at this time.
*Canada imposed a surtax of 100% on EVs produced in China and imported into Canada, effective October 1, 2024. This was on top of an existing import tariff of 6.1% that applies to EVs produced in China and imported into Canada. Canada also applied a 25% surtax on imports of steel and aluminum products from China, effective October 22, 2024.

Answer to the previous trivia question: Usain Bolt won the 100-metres sprint on August 14, 2016 at the Rio de Janeiro Games, becoming the first person to win the event in three consecutive Olympics.

Today’s trivia question: When was the U.S. Bureau of Labor Statistics (née Bureau of Labor) created?