Over the weekend, China announced tariffs on Canada in retaliation to the levy on Chinese electric vehicles (EVs) and steel and aluminum products that Canada imposed last October.*

In a separate move last week, China announced tariffs of 10-15% on a range of U.S. agriculture exports.

After President Biden indicated last May that the U.S. would be imposing a 100% tariff on Chinese EVs and a 25% tariff on steel and aluminum products, the Canadian government announced it would do the same thing. In response, China launched an anti-dumping investigation into Canada’s canola exports to China.

Then, on Saturday, the Chinese government said it will impose a 100% tariff on imports from Canada of canola (a.k.a. rapeseed) oil and oil cake (but not the seeds themselves) and peas. It will also impose a 25% tariff on pork and seafood products from Canada. The tariffs are to begin March 20.

The dollars at stake using last year’s sales figures and the specific product codes listed in the Chinese tariff order as a guide are:

CANADA

• Processed canola (100% tariff) - Canada sold China $938 million of canola oil and cake (a.k.a. meal), 11% of the total (the U.S. bought the most at 86%).
• Canola seed not included - At just under $4 billion, most of Canada’s canola exports to China were the unprocessed seeds, which are not included in the tariff.
• Peas (100% tariff) - Canada sold China $309 million worth of peas, 20% of the total (India was the largest buyer at 50%). 
• Pork (25% tariff) - Canada exported $467 million worth of pork to China, 9% of the total (the U.S. and Japan were the two largest buyers at 30% and 28%, respectively).
• Seafood (25% tariff)- China bought almost $1.2 billion worth of seafood from Canada, 22% of the total (the U.S. bought the most at 61%).

That adds up to $2.9 billion worth of Canadian products facing new Chinese tariffs.

ALBERTA

• Processed canola (100% tariff)- Alberta sold China $408 million of canola oil and cake (a.k.a. meal), 16% of the total (the U.S. bought the most at 84%).
• Peas (100% tariff) - Alberta sold China $138 million worth of peas, 25% of the total (India was the largest buyer at 56%). 
• Pork (25% tariff) - At $26.1 million (4%) of Alberta’s total international pork exports, China is not a major customer (Japan bought the most Alberta pork last year at 45%).

Based on last year’s numbers, Alberta’s exposure to the new tariffs is over half a billion dollars. This represents about 8% of the $6.7 billion Alberta exported to China in 2024.

This is not the first time China has taken trade action against Canada aimed at canola. In 2019, China suspended the licenses of two major Canadian canola exporters amid political tensions, resulting in a sharp decline in canola seed shipments.

Given that the Chinese government has justified the new tariffs as a response to Canada’s tariffs on EVs and steel and aluminum, it is likely that it will be expecting change on that front before removing them.

In the meantime, although China is not Canada’s or Alberta’s main customer for these products, it is a significant one and the dollar values involved are large. Uncertainty with regard to U.S. tariffs and the need to scramble to find alternatives to the Chinese market make for a difficult period ahead for Canadian producers.

*Canada imposed a surtax of 100% on EVs produced in China and imported into Canada, effective October 1, 2024. This was on top of an existing import tariff of 6.1% that applies to EVs produced in China and imported into Canada. Canada also applied a 25% surtax on imports of steel and aluminum products from China, effective October 22, 2024.

Answer to the previous trivia question: Benedict Cumberbatch portrayed Alan Turing in the 2014 movie “The Imitation Game.”

Today’s trivia question: True or false: canola is part of the mustard family?