Canada’s agriculture sector could be losing one of its best international customers.
Driving the news: Chinese tariffs on $3.7 billion worth of Canadian agricultural products came into effect yesterday, including 100% tariffs on canola oil and canola meal — finely ground-up seed that’s often used to feed livestock. The levy is a direct retaliation for the tariff that Ottawa slapped on Chinese-made EVs last year.
- Ironically, it was the U.S. — the other country that Canada is in a trade war with — that championed the push among its allies to hit Chinese EVs with tariffs.
Why it matters: China is Canada’s second-largest market for canola products, trailing only the U.S. With the Americans slated to hit Canadian products, including canola, with a 25% tariff in April, the industry is now facing potentially existential threats in its biggest markets.
- Canada exported $7.7 billion and $4.9 billion worth of canola products to the U.S. and China, respectively, in 2024. The rest of Canada’s top 20 international canola buyers imported less than $2 billion worth of products combined.
- While canola seed itself is currently exempted from China’s tariffs, other products will be hit hard. Canada sold $1 billion worth of canola oil and meal to China alone last year.
What’s next: Farmers and industry groups are asking the feds to help cover the losses they expect from the tariffs, arguing that they’re the ones paying the price for a policy designed to protect Canada’s auto industry.—LA