China announced on Tuesday that it will impose preliminary anti-dumping duties of 75.8% on Canadian canola imports, escalating a trade dispute that began last August when Canada placed tariffs on Chinese electric vehicles. The provisional measure, set to take effect Thursday, was revealed in a statement from China’s Ministry of Commerce.
The news sent ICE November canola futures tumbling 6.5% to a four-month low. “This really came as a surprise and a shock,” said Tony Tryhuk, a trader at RBC Dominion Securities.
China, the world’s largest importer of canola, sources nearly all its supply from Canada. Traders warn the steep duty would effectively halt imports. “It is like telling Canada we don’t need your canola,” remarked one Singapore-based oilseed trader.
The Ministry’s ongoing probe, launched in September 2024, alleges Canada’s canola sector has benefited from “substantial” government subsidies. A final decision is expected by September, though the deadline could be extended by six months.
The move contrasts with the warmer tone from June, when Chinese Premier Li Qiang told Canadian Prime Minister Mark Carney that there were no deep-seated conflicts of interest between the nations. Analysts say the tariff will intensify pressure on Ottawa to resolve tensions with Beijing, which has already imposed duties on Canadian canola oil and meal earlier this year.
Finding an alternative supplier will be challenging for China’s aquaculture feed industry, though Australia—set to resume limited exports after a multi-year halt—could fill some of the gap. Still, experts warn fully replacing Canadian supply will be difficult without a sharp drop in demand.
