China Plans to Reduce Tariffs on Canadian Canola and Other Agricultural Products
Canada expects that by March 1, China will make a decision to significantly reduce tariffs on canola imports, which could be a key step towards resolving the long-standing trade conflict between the two countries. This conflict has affected agricultural product supply volumes and complicated bilateral relations.
This is reported by AgroReview
Terms of Agreements and Tariff Changes
Canadian Prime Minister Mark Carney announced during his visit to China that Beijing is prepared to lower tariffs on canola to approximately 15% instead of the current rate of over 80%. China also plans to temporarily suspend anti-dumping tariffs on imports of canola meal and lobsters. These agreements are the result of several months of negotiations aimed at restoring relations after a tense period.
At the same time, Canada agreed to allow 49,000 Chinese electric vehicles into its market at a tariff rate of around 6% instead of the previous 100%.
Market Reaction and Future Prospects
Following the announcement of potential tariff reductions, canola futures in New York rose by 2.6%, reaching their highest level since early December. There is currently no official confirmation from Beijing, but both parties have expressed their intention to expand cooperation in the agricultural sector and in food security.
The prolonged tension in relations arose after Canada imposed tariffs on Chinese electric vehicles, steel, and aluminum in 2024. In response, China implemented a 100% tariff on Canadian canola oil and meal and initiated an anti-dumping investigation into Canadian canola. A final decision from the investigation is expected by March 9.
The imposed tariffs effectively blocked Canadian canola and its processed products from the Chinese market, halting trade worth CAD 4.9 billion (USD 3.5 billion) in 2024. Reducing tariffs could restore market access for Canadian farmers and exporters who faced oversupply and limited export opportunities.
At the same time, China has been seeking alternative suppliers of canola, including importing trial shipments from Australia after a five-year hiatus due to phytosanitary restrictions.
“Returning tariff rates to a level that will make Canadian canola competitive again will be a relief for Chinese processors, some of whom have been idle due to a lack of viable alternative supply sources,” said Yven Pei, director of the consulting firm Trivium China in Beijing.
It is expected that the suspension of tariffs on canola meal and lobsters will last from March at least until the end of the current year. The Canadian Prime Minister aims to strengthen cooperation with Beijing and reduce the country’s dependence on the U.S. after President Donald Trump imposed extensive trade restrictions.