Chinese tariffs come into force on $3.7-billion worth of Canadian goods

New Chinese tariffs on Canadian agricultural and food products came into force just after midnight Thursday, 12 days after they were announced by Beijing as retaliation for a levy on Chinese electric vehicles imposed by Ottawa last year.

The $3.7-billion worth of tariffs on agricultural and food products piles even more pressure on Canadian exporters already worried about an escalating trade war with the United States.

In a statement this month, China’s State Council said the Canadian EV tariffs, which also included a 25-per-cent levy on Chinese steel and aluminum, had “seriously violated the rules of the World Trade Organization” and “damaged China’s legitimate rights and interests,” leaving it with no choice but to respond.

It imposed a 100-per-cent tariff on Canadian canola oil, oil cakes and pea imports, as well as a 25-per-cent duty on Canadian pork and aquatic products.

The Chinese tariffs mean Canadian canola farmers “are facing an unprecedented situation of trade uncertainty from our two largest export markets only weeks before planting begins,” said Rick White, president of the Canadian Canola Growers Association.

“The impact of the federal government’s trade policy decisions is now playing out at the farmgate, making it imperative that government respond with a plan for financial compensation commensurate with the losses incurred,” he said in a statement.

According to the Canola Council of Canada, Canada exported almost $5-billion worth of canola products to China in 2024, including around a billion dollars worth of canola meal and oil. China is Canada’s second-largest market, but the new tariffs will be prohibitive to the export of Canadian canola oil and meal to China, the trade group said.

China is also a major buyer of Canadian seafood products, with lobster retailers in particular expected to feel the pinch of the new levies.

In response to the tariffs, leaders from the Prairie provinces have requested action from Ottawa to support farmers. Alberta, Saskatchewan and Manitoba rely heavily on China for canola exports, sending billions of dollars in products overseas each year.

An association representing canola growers in Alberta has also asked the federal government to cover losses resulting from the tariffs. The impact of tariffs from China alone “could be potentially devastating,” said Karla Bergstrom, executive director of Alberta Canola.

The situation has left many farmers without bids from sellers, Ms. Bergstrom said. Canola prices have also plummeted since China announced the tariffs.

“It’s prohibitive,” Ms. Bergstrom said. “It will be uncompetitive to sell to China.”

Beijing previously targeted canola exports during a period of high tension between Canada and China after the twin arrests of Huawei executive Meng Wanzhou at Vancouver’s airport and Canadians Michael Kovrig and Michael Spavor in China. That ban was lifted in 2022 after three years, to the great relief of the canola industry.

But the potential to use canola exports as a political tool was made clear, and one of the first responses China announced to the Canadian tariffs last year was an anti-dumping investigation into canola. That probe has not yet completed, and analysts have warned the tariffs could be expanded to cover the entire sector, as they were in 2022.

Chinese state media coverage of the new tariffs made clear they were intended to send a message.

Canada’s EV tariffs were imposed after a similar move by the U.S. and consultation with the Joe Biden administration, much to the chagrin of Beijing, which has always complained about Ottawa following the U.S. lead on foreign policy. In late February, current U.S. Treasury Secretary Scott Bessent encouraged Canada to follow Mexico in matching President Donald Trump’s new tariffs against China.

Speaking to the Global Times, a Chinese state-run newspaper, Shi Xiaoli, director of the Beijing-based WTO Law Research Centre, said it was important for China to send the message that “if any nations try to gain U.S. favour by imposing extra tariffs on China in return for the U.S. to lift tariffs on them, then China will also use tools to defend its own interests.”

In a social media post, state broadcaster CCTV said for China “it is not difficult to find alternative sources of goods imported from Canada, but for Canada, its alternative market space has been sharply compressed, which means Canada has to bear more losses.”

Relations between Ottawa and Beijing have not recovered since the Michaels saga, despite efforts in the past year to rebuild ties, including with a surprise visit by Foreign Minister Mélanie Joly in July. Some observers had speculated that there could be space for a reset with the resignation of Justin Trudeau, who was prime minister throughout the rocky period.

But these hopes appeared to be dashed with the new tariffs this month, and the revelation by The Globe and Mail on Wednesday that four Canadians had been executed by China earlier this year, a shocking move in a country that often imposes but rarely carries out the death penalty against Westerners.

With a report from the Canadian Press