China has announced that it will impose retaliatory tariffs on certain Canadian agricultural and food products from March 20, deepening concerns over a brewing global trade war.
In a statement on Saturday, China’s Ministry of Finance said a 100% tariff would be imposed on rapeseed oil, rapeseed meal, and pea imports from Canada, as well as a 25% tariff on some seafood products and pork.
The ministry said the decision was made in response to Canada’s “discriminatory” 100% levy on Chinese electric vehicles and 25% tariffs on Chinese steel and aluminum, which came into force last year.
America’s neighbor to the north is a major global producer of rapeseed, also known as canola, and China is its second-largest market, according to the Canola Council Of Canada. Canadian exports of canola seed, oil, and meal to China were valued at C$5 billion (around $3.5 billion) in 2023, per the Canola Council.
Beijing’s announcement means Canada is now facing a trade battle on two fronts as pressure on its economy continues to grow.
Josh Lipsky, the senior director of the Atlantic Council’s GeoEconomics Center, told Business Insider that the timing of China’s tariffs announcement was particularly noteworthy. The move came just a day before Canada’s governing Liberal Party is set to announce a new leader after Prime Minister Justin Trudeau said in January that he would resign.
“China’s needed to get the retaliation done,” Lipsky said.
“I think it’s China trying to reset with Canada ahead of what’s going to be a much broader trade conflict with the US,” he continued, adding that Beijing likely wanted to “clear the decks” before a new Canadian leader was in place.
The announcement may also have been designed to serve as a warning to Canada not to align itself too closely with the US on trade policy.
The New York Times reported that China Central Television had released a commentary that called the tariffs “a powerful countermeasure to Canada’s wrong choice, and a strong warning to some countries that intend to impose additional tariffs on China in exchange for the United States not to impose additional tariffs on them.”
Paul Smetanin, president of the Canadian Centre for Economic Analysis, told BI that China’s move was not surprising but that it underscored the “delicate environment in which Canada must manage its global economic interests.”
“Moving forward, the government’s priority must be to develop a nimble trade strategy capable of mitigating the risks posed by an increasingly unpredictable international marketplace,” he said.
The news will nevertheless add to increasing uncertainty across North America over President Donald Trump’s tariff threats.
The Trump administration this week announced a monthlong delay to some 25% tariffs on Canada and Mexico amid mounting fears over the economic implications of a wider trade war. It also increased a 10% tariff on all imports from China to 20%, sparking swift retaliation from Beijing.
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