context: The State Council Customs Tariff Commission has announced a sharp increase in tariffs on Canadian agricultural imports, further escalating trade tensions. Presented as a direct response to Canada’s October 2024 tariffs on Chinese electric vehicles, steel and aluminium, the measure is separate from the Ministry of Commerce ongoing anti-dumping investigation into Canadian canola, launched in September. While the latest tariffs are expected to have little direct impact on canola oil imports, they carry significant implications for canola meal supply.
A 100 percent tariff on Canadian canola oil, canola meal and peas and a 25 percent tariff on seafood and pork will take effect on 20 March 2025.
The tariffs apply to the listed products without exemptions under existing bonded or tax reduction policies. Beijing framed the measure as a necessary counteraction, labelling Canada's tariffs as discriminatory and violating WTO rules.
The impact on Canadian canola oil will be minimal, argues China Grain Net.
Canola oil, a widely used cooking oil, has already seen a sharp decline in Chinese imports from Canada, accounting for less than 1 percent of total imports in 2024, while Russia supplied 58 percent. Some shipments arrived in early 2025, but further wash trades remain likely.
The tariffs will effectively exclude Canadian canola oil from the Chinese market, easing oversupply concerns and stabilising domestic prices.
However, the impact on canola meal will be more pronounced.
Canola meal, a key protein source in animal feed, is a critical Canadian export to the PRC. Canada supplied 74 percent of the PRC’s imported canola meal in 2024, making up 45 percent of total domestic supply.
The ongoing anti-dumping investigation into Canadian canola seeds, launched in September 2024, has already curbed imports.
If the investigation results in further trade restrictions, Chinese canola meal imports from Canada are expected to decline further, tightening domestic supply and potentially driving up feed costs.
The tariffs align with Beijing’s broader strategy to diversify agricultural imports, reducing reliance on Canada in favour of Russia and Belarus. These measures signal a potential long-term shift in the trade relationship, with implications for both countries' agricultural sectors.