Ottawa’s canola win with Beijing tests how far Canada will lean into China ties
China is cutting a swath through its own trade barriers for Canadian canola and seafood – and tying that shift directly to better access for Chinese electric vehicles in Canada.
According to BNN Bloomberg, China’s finance ministry will suspend 100 percent tariffs on Canadian canola meal and peas, and halt 25 percent tariffs on lobster and crab imports, starting March 1 and running through the end of 2026.
CTV News report that these punitive rates “will not be imposed,” effectively reopening parts of a market that has been constrained since a trade spat with Ottawa escalated.
The more critical change for Canadian agriculture – and for capital tied to the sector – sits on the canola seed side.
Reuters reports that China’s Ministry of Commerce has sharply reduced its final anti‑dumping duty on Canadian canola to 5.9 percent from a preliminary 75.8 percent imposed in August, following a 17‑month investigation.
The seed will also remain subject to China’s standard 9 percent import tariff, bringing the combined rate to 14.9 percent.
This outcome broadly aligns with Prime Minister Mark Carney’s earlier expectation of an overall rate “around 15 percent.”
These tariff moves did not come for free.
Carney used a January visit to Beijing to strike a package deal that links agricultural tariffs to Chinese electric vehicles.
During that trip, he pledged that Canada would allow into the country up to 49,000 Chinese EVs each year at a tariff of 6.1 percent on most‑favoured‑nation terms, in exchange for lower duties on canola seed and a broader accord on “electric vehicles and canola.”
According to BNN Bloomberg, Carney reached the deal in meetings with Chinese President Xi Jinping.
Before the final anti‑dumping ruling, Ottawa had expected Beijing to cut canola seed tariffs to a combined rate of about 15 percent from 84 percent, with changes to take effect by March 1, as reported by Reuters.
Early announcements from China’s finance ministry on the suspension of tariffs for canola meal, peas, lobster and crab did not mention canola seed, canola oil or pork, leaving some uncertainty until the commerce ministry released its final decision on canola seed.
China was Canada’s second‑largest market for canola in 2024, according to Bloomberg.
Canola futures in New York rose after Carney’s visit and reached their highest levels since August, as Chinese buyers began booking cargoes in anticipation of tariff relief.
Bloomberg also notes that disruptions in the rapeseed‑meal trade had pressured China’s fishery sector, since “shrimp, crab and carp all feed heavily on the product.”
Market participants appear to be acting on the policy shift.
“Chinese buyers have been booking Canadian canola cargoes for March already,” said Even Rogers Pay, director at Beijing‑based consultancy Trivium China, in comments reported by Reuters.
He said that gives him “a pretty high degree of confidence” that China will follow through on the reduced tariff rate, while noting that canola oil and pork were not mentioned in the initial suspension and could still be subject to further adjustments.
On the farm side, CTV News reports that Manitoba farmer Curtis McRae plans to seed around 2,000 acres of canola this year, keeping acreage “very close to the same as last year” while “hoping for the markets to rebound.”
He said earlier tariffs “took a billion dollars out of families farms’ pockets,” arguing that when “agriculture gets hit, everybody pays a price someway, somehow.”
Farmer Warren Ellis told CTV News the deal is “better, but it’s not the whole answer,” pointing out that “oil which is still at 100 percent” remains unresolved.
He said canola prices have risen about a dollar a bushel since the January deal, which on his farm equates to about $50 an acre and “the difference between profit and loss.”
In Manitoba, Premier Wab Kinew called the canola development “great news,” but told CTV News that “pork is big in Manitoba too” and said he intends to keep pressing Ottawa for progress on pork access.
Economist Shiu‑Yik Au, an associate professor in the Accounting & Finance Department at the University of Manitoba, told CTV News the suspension of some canola and seafood tariffs is a “win‑win” but warned that duties could return if relations deteriorate.
He said Canada’s chances of “a long‑term positive trade outcome” depend on Carney keeping “a good productive relationship with a wide‑variety of leaders.” He added that the relief should allow farmers to sell more at higher prices and diversify beyond the US market.
According to Reuters, these moves come amid a wave of Western visits to Beijing as US President Donald Trump’s trade policies strain Washington’s alliances.
China has sought to position itself as a stable, reliable economic partner.
By winning lower canola tariffs and wider access for Chinese EVs, Carney went beyond some European leaders and signalled Canada’s aim to play a larger role in a trade order less reliant on the United States.
