If you know a canola farmer, give them a hug today. They could really use it.
What happened: China announced a 75.8% duty on imports of Canadian canola starting tomorrow, the result of an anti-dumping probe launched last year. The rate could still change before the probe officially closes next month, or if the probe is extended by six months.
- China has routinely used curbs on Canadian canola as a policy cudgel, and this time the duties are a direct response to Canada's 100% tariff on Chinese EVs.
- China also announced an anti-dumping probe into Canadian pea starch — Canada was the top pea starch exporter to China before Russia surpassed it last year.
Why it matters: A duty this high is basically a ban, meaning Canada is shut out of its second-biggest canola customer and top buyer of canola seeds. In 2023, the last full year before the probe, China imported $5 billion worth of the bright yellow crop from Canada.
- And with China now accepting Australian canola shipments after a yearslong ban, our frenemies from Down Under have the inside track to snatch the canola crown.
Big picture: This development isn’t just bad news for Canada’s agriculture sector; it’s a worrying sign that China might not be as conciliatory as it seemed. At a time when experts are advocating for closer trade ties to offset bumps with the U.S., this is a step back.
What’s next: Canada’s agriculture minister said that Ottawa would need more details before it would consider relaxing Chinese tariffs in exchange for China nixing the new duty.—QH