Canola Clash: China Slaps Heavy Tariffs on Canadian Imports Amid Trade Dispute

China has introduced preliminary anti-dumping duties of 75.8% on Canadian canola imports in a significant escalation of the ongoing trade dispute with Canada. This dispute traces back to Canada's tariffs on Chinese electric vehicles imposed last year. The Chinese Ministry of Commerce announced that these provisional duties would take effect starting Thursday.

Following the announcement, ICE November canola futures dropped by 4% to a three-month low. Canada, being the predominant supplier of canola to China, faces severe challenges as these duties could virtually halt exports to the Chinese market if sustained. An oilseed trader in Singapore noted that such high tariffs signal China's disinterest in Canadian canola.

The investigation by China's Ministry of Commerce claims Canada's canola sector benefits largely from government subsidies. Final decisions on the duties are expected by September, though extensions are possible. The ongoing situation pressures Canada to address these trade tensions urgently, as parallel investigations into Canadian pea starch and halogenated butyl rubber continue.

(With inputs from agencies.)