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In a significant escalation of an ongoing trade dispute, China announced on Tuesday, August 12, 2025, that it will impose preliminary anti-dumping duties of 75.8% on Canadian canola imports, effective from Thursday, August 14, 2025. The move, described as a “gut punch” by industry experts, follows Canada’s imposition of tariffs on Chinese electric vehicle, steel, and aluminum imports in August 2024.
China, the world’s largest importer of canola (also known as rapeseed), sources nearly all of its supply from Canada, with approximately 4.6 million tonnes imported in the 2024-25 marketing year. The steep duties are expected to severely disrupt this trade, potentially halting Canadian canola exports to China. The Intercontinental Exchange (ICE) November canola futures (RSX5) plummeted 6.5% to a four-month low following the announcement.
“This is huge. Who will pay a 75% deposit to bring Canadian canola to China? It’s like telling Canada we don’t need your canola,” said a Singapore-based oilseed trader. Tony Tryhuk of RBC Dominion Securities called the decision a “surprise and a shock,” noting its significant impact on the canola market.
China’s Ministry of Commerce stated that an anti-dumping investigation launched in September 2024 found that Canada’s canola industry benefited from “substantial” government subsidies and preferential policies. The provisional duties will remain in place until the investigation concludes in September 2025, with the possibility of a six-month extension. A final ruling could adjust the rate or reverse the decision.
Canada, now facing trade conflicts with both China and the United States, has not yet responded officially, with no immediate comments from the Canadian embassy in Beijing, the trade ministry, or the prime minister’s office. Earlier this year, China imposed a 100% tariff on Canadian canola oil and meal, further straining trade relations.
Replacing Canadian canola will be challenging for China, which uses the crop primarily for animal feed in its aquaculture sector. Analysts suggest Australia, the second-largest canola exporter, could step in, but its supply has been limited in China since 2020 due to restrictions related to a fungal disease called “blackleg.” Even with potential Australian imports, fully replacing Canadian canola would be difficult without a sharp drop in demand, according to Donatas Jankauskas of CM Navigator.
The duties exacerbate existing pressures on canola prices, with Canada’s larger-than-expected crop already contributing to a bearish market outlook. “This will accelerate losses in canola futures,” Tryhuk added, noting that commodity funds holding long positions in ICE canola futures may fuel further selloffs. Ventum Financial broker David Derwin suggested that traders are uncertain about the duties, as they are not yet permanent, questioning whether this is a negotiating tactic or a firm stance by China.
In related developments, China also announced an anti-dumping probe into Canadian pea starch and imposed provisional duties on halogenated butyl rubber imports, signaling broader trade tensions.
