Escalating Trade Tensions: China Imposes Duties on Canadian Canola

China has imposed preliminary anti-dumping duties of 75.8% on Canadian canola imports, escalating a trade dispute that started with Canadian tariffs on Chinese electric vehicles. This decision could severely impact Canadian exporters, as China is a major canola importer, sourcing nearly all its supplies from Canada.

In a significant development in ongoing trade tensions, China announced on Tuesday preliminary anti-dumping duties on Canadian canola imports. The duties are set at a steep 75.8%, effective Thursday, according to China's Ministry of Commerce. This escalates a year-long trade dispute triggered by Canada's tariffs on Chinese electric cars imposed last August.

The introduction of these duties comes as a substantial blow to the Canadian canola market, as China is the world's largest importer of the crop, primarily sourcing it from Canada. ICE November canola futures dropped 6.5% to a four-month low upon the announcement. The decision, deemed surprising by market analysts, stands to severely disrupt the trade relationship.

China's investigation, which began in September 2024, found that Canada's canola industry had unfair advantages due to government subsidies and preferential policies. The Chinese government now has until September to make a final decision, potentially revising the duties or overturning the current ruling. This move adds pressure on Canada to resolve rising trade frictions with China, amidst similar tensions with the United States.

(With inputs from agencies.)