China’s 100% tariff on canola oil and peas

On March 8, 2025, the Chinese Ministry of Finance announced the implementation of additional tariffs on certain Canadian agricultural and food products, effective from March 20. The escalating trade tensions between the two countries highlight the growing complexity of global trade relations and their far-reaching economic implications.

Background of the Trade Dispute

The latest round of tariffs is part of a broader pattern of escalating trade tensions between China and Western countries. In October 2024, Canada imposed additional tariffs on Chinese-made EVs, steel, and aluminum, aligning with similar measures taken by the United States. The Canadian government justified these tariffs as a necessary step to protect domestic industries from unfair competition and to counter China’s alleged overproduction and market manipulation.

However, China swiftly condemned Canada’s actions, labeling them as protectionist and in violation of World Trade Organization (WTO) rules. The Chinese government argued that the tariffs were politically motivated and an attempt to curb China’s growing influence in the EV market.

Details of the New Tariffs

Let’s take a closer look at the Tariffs! Starting March 20, 2025, China will impose the following additional tariffs on Canadian products:

• 100% tariff on canola oil and peas
• 25% tariff on seafood products and pork

These measures are expected to have significant consequences for Canadian exporters, particularly in the agricultural and seafood sectors. Canada is one of the world’s leading producers of canola, and China is an important market for its exports. In 2024, China’s canola imports increased from 5.49 million tons in the previous year to 6.39 million tons, of which 6.13 million tons were imported from Canada, totaling $3.29 billion. Similarly, Canadian seafood products and pork have enjoyed strong demand in the Chinese market.

Implications for Canada

The new tariffs will likely have a profound impact on Canadian farmers and exporters. The 100% tariff on canola oil could effectively halt Canadian canola exports to China, which has been one of the largest destinations for Canadian canola in recent years. This could result in significant revenue losses for Canadian farmers and processors, forcing them to seek alternative markets or face financial hardship.

The seafood and pork industries are also expected to suffer. China is a major destination for Canadian lobster, crab, and pork products. For example, in 2020, Canadian pork exports to China and Hong Kong accounted for 47% of the total export volume. The 25% tariff will make these products less competitive, potentially leading to job losses and economic strain in Canada’s maritime provinces and rural communities.

Broader Economic Consequences

The growing trade tensions between China and Canada go beyond just economic losses—they’re reshaping global relationships. This dispute isn’t happening in isolation. It adds even more strain to the already fragile diplomatic ties between the two countries, a relationship that’s been rocky ever since the arrest of Huawei executive Meng Wanzhou in 2018.

But here’s where things get interesting. These tariffs might actually push Canada to rethink its trade strategy. We could see a stronger shift toward new trade partners, especially within the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union. Could this be an opportunity in disguise?

And let’s not forget the bigger picture. The ongoing back-and-forth tariffs between China and Western nations are chipping away at the foundations of the global trading system. The World Trade Organization (WTO) has already been struggling to maintain its authority, and if these trade wars drag on, the whole system could become even weaker. So, what does this mean for the future of global trade? Are we headed toward a more fragmented, unpredictable world economy?

Not Only Canada

China isn’t just focusing on Canada—it’s also hitting the U.S. with tariffs. This is all part of the ongoing trade battle between the two economic giants. In response to American tariffs on Chinese goods, Beijing has fired back with its own, targeting key U.S. exports like soybeans, pork, and high-tech components. It’s not just about trade; it’s about bigger issues like technology, market access, and national security. And here’s the thing—these back-and-forth tariffs aren’t just affecting China and the U.S. They’re shaking up global supply chains, forcing companies to rethink where they do business and who they trade with. So, could this be the push businesses need to diversify their markets?

Conclusion

China’s latest tariffs on Canadian agricultural and seafood products represent a significant escalation in the ongoing trade dispute between the two countries. The measures will likely have far-reaching economic consequences for Canadian exporters, while also exacerbating diplomatic tensions. Moving forward, Canada will need to adopt a multifaceted approach that combines market diversification, diplomatic engagement, and strategic alliances to navigate the challenges posed by the shifting landscape of global trade.

Canada has the potential to thrive in the global economy by leveraging its strengths. The country is a major exporter of energy resources, and with this advantage, Canada can lead the way in addressing environmental issues.

As a business operating in Canada, you have the opportunity to be part of this movement. Together, we can take action. Through carbon credits, we can contribute to not only reducing emissions but also enhancing the ESG efforts of companies. Let’s work together to make a difference.