China has imposed a preliminary 75.8 percent anti-dumping duty on Canadian canola seed, which shuts Canada out of its
second-largest export market and escalates a year-long trade dispute that began after Ottawa introduced tariffs on Chinese
electric vehicles in 2024. In addition to tariffs on Chinese EVs, Canada has imposed duties on Chinese steel and aluminum.
The Chinese Ministry of Commerce announced the duty would take effect on August 14, citing allegations of subsidies and
unfair pricing practices in Canada’s canola industry. The Canadian government has strongly rejected the finding, but
indicating it remains open to dialogue with Chinese officials to address trade concerns.
Market Fallout: Canola Prices Plunge Amid Export Uncertainty
The announcement shook markets, with November canola futures dropping 6.5% to USD 650.30/ton. The high duty
effectively shuts Canada out of the Chinese market. In 2024, Canada exported nearly CAD 5B in canola to China, mostly
from Saskatchewan. Farmers are bracing for significant financial losses just as harvest begins, with some reporting price drops of about CAD 3 per bushel that could cut between CAD 120 and CAD 180 per acre from their revenues.
The canola dispute is expected to hit farmers hard, especially in Alberta, Saskatchewan, and BC, increasing uncertainty in rural areas. Farmers urge the government to rethink tariffs on Chinese EVs to ease tensions.
Global Market Dynamics: Australia Steps In but Canadian Supply Still Critical
Meanwhile, Australia is trying to regain access to China’s canola market but can't fully replace Canadian supply. Despite
potential new suppliers, China will likely still need Canadian canola for feed and cooking oil. A final decision from Beijing
may change tariffs, but current uncertainty is hurting Canadian farmers. PM Mark Carney says support measures and
efforts to boost exports and domestic demand, like renewable diesel projects are underway. With canola contributing over
CAD 43 billion and 200,000 jobs, the impact is significant.
The ongoing canola dispute underscores the interconnected risks of global trade policy, with ripple effects that threaten farm incomes, rural stability, and broader sector growth. Continued dialogue and strategic policy support will be critical to safeguarding Canadian agriculture and maintaining its role in global supply chains.
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