China has introduced an initial anti-dumping levy on Canadian canola imports, marking a new development in a longstanding trade dispute that originated from Canada’s imposition of tariffs on Chinese electric vehicle imports in August last year. The announced provisional duty rate stands at 75.8 percent, effective from Thursday.
As the world’s largest importer of canola, also known as rapeseed, China heavily relies on Canadian canola for its supplies. The recent move by China has raised concerns among traders, with one Singapore-based oilseed trader highlighting the significant impact of the high deposit requirement on bringing Canadian canola into China.
Following an anti-dumping investigation initiated in September 2024, China’s Ministry of Commerce stated that Canada’s agricultural sector, particularly the canola industry, had benefited from substantial government subsidies and preferential policies. The final decision on the duties is expected by September, with a possibility of an extension by six months. This decision represents a departure from the conciliatory tone observed in June when China’s Premier Li Qiang emphasized minimal conflicts of interest with Canada during discussions with Prime Minister Mark Carney.
The imposition of duties on Canadian canola imports poses a challenge for China, as replacing millions of tons of Canadian canola at short notice is deemed difficult by analysts. The situation also presents an opportunity for Australia to regain access to the Chinese market, with the potential for increased imports following a freeze in trade since 2020 due to disease-related regulations.
In a separate development, China initiated an anti-dumping investigation into pea starch imports from Canada, which could extend for up to a year. Canada, a major exporter of peas, faced a decline in market share to Russia, particularly in China, in the previous agricultural season. Both Canada and the U.S. have accused China of dumping and subsidizing pea protein exports to North America in recent years.
Simultaneously, China and the U.S. have indicated their commitment to ongoing negotiations for a new trade deal to avert the escalation of tariffs that could have led to a virtual trade embargo between the two countries. The current agreement maintains a 30 percent tariff on Chinese imports and a 10 percent duty on U.S. imports, preventing a sharp increase in tariffs that would have strained trade relations.
This series of trade actions between China and various countries underscores the complex dynamics of global trade and the critical role of negotiations in resolving disputes while maintaining economic stability.
