The Chinese government has announced new tariffs on Canadian agricultural products, including a 100% duty on over $1 billion worth of rapeseed oil, oil cakes, and pea imports, and a 25% duty on $1.6 billion worth of Canadian pork and aquatic products.
The move comes as part of an escalating trade dispute between the two nations, with China accusing Canada of violating World Trade Organization (WTO) rules and engaging in protectionist practices.
Canola —one of Canada’s top exports to China— was notably excluded from the tariffs, signaling that Beijing may be leaving the door open for future trade negotiations.
Political analysts are saying that the timing of China’s tariffs serves as a warning to Canada against aligning too closely with U.S. trade policies. Dan Wang, China director at Eurasia Group, noted that China’s delayed response to Canada’s October tariffs reflects both capacity constraints and strategic signaling. “By striking now, China reminds Canada of the cost of aligning too closely with American trade policy,” Wang had said.
The Trump administration had previously signaled it could relax the 25% import levies on Canada and Mexico if they align with U.S. trade measures against China, particularly over issues like fentanyl flows.
The new tariffs are the latest development in a growing trade dispute between China and Canada. In August, Canadian Prime Minister Justin Trudeau imposed levies on Chinese goods, citing concerns over China’s state-directed policy of overcapacity. This followed similar actions by the United States and the European Union, both of which also applied tariffs on Chinese-made electric vehicles (EVs).
In response, China launched an anti-dumping investigation into Canadian canola imports in September. More than half of Canada’s canola exports go to China, with the trade valued at $3.7 billion in 2023, according to the Canola Council of Canada.
Canola Exclusion Suggests Room for Negotiations
Rosa Wang, an analyst with agricultural consultancy JCI, noted that the exclusion of canola from the latest tariffs could be a strategic move by Beijing to leave room for negotiations.
“The investigation on Canadian canola is still ongoing. That canola was not included in the list of tariffs this time might also be a gesture to leave room for negotiations,” she said.
Beijing may also be hoping for a change in Canada’s government following the next national election, which must be held by October 20. A new administration could provide an opportunity to reset bilateral relations, similar to how China eased trade restrictions on Australia after a change in leadership.
China-Canada Trade Relations Under Strain
China is Canada’s second-largest trading partner, trailing far behind the United States. In 2024, Canada exported $47 billion worth of goods to China, according to Chinese customs data. However, the ongoing trade dispute has strained relations between the two nations.
Even Pay, an agriculture analyst at Trivium China, expressed confusion over Beijing’s latest move. “To be honest, I don’t understand why they are doing this one at all,” Pay said. She added that Beijing might use Canada’s upcoming election as an opportunity to reset relations, as it did with Australia.
China’s approach to Canada mirrors its past actions against Australia. In 2020, Beijing imposed tariffs, bans, and restrictions on key Australian exports, including barley, wine, beef, coal, lobster, and timber, in retaliation for Canberra’s call for a COVID-19 origins probe. These measures were not lifted until 2023, a year after Australian Prime Minister Anthony Albanese replaced Scott Morrison, who had initiated the inquiry.
As the trade dispute escalates, all eyes are on Canada’s upcoming election and whether a change in leadership could pave the way for improved relations with China. In the meantime, Canadian exporters are bracing for the impact of the new tariffs, while Beijing continues to signal its willingness to negotiate—provided Canada adjusts its trade policies.
