In a significant escalation of global trade tensions, China has announced retaliatory tariffs on over $2.6 billion worth of Canadian agricultural and food products. This move comes in response to Canada’s October 2024 tariffs on Chinese electric vehicles, steel, and aluminum, mirroring the ongoing trade war between major global economies.
China’s Retaliatory Measures
Effective March 20, 2025, the newly imposed Chinese tariffs target key Canadian exports, particularly in the agricultural sector:
- 100% tariff on $1 billion worth of:
- Rapeseed oil
- Oil cakes
- Pea imports
- 25% tariff on $1.6 billion worth of:
- Aquatic products
- Pork
Interestingly, canola—a major Canadian export—has been left out, possibly indicating China’s willingness to negotiate further.
Beijing’s Justification & Strategic Significance
China’s commerce ministry has accused Canada of violating World Trade Organization (WTO) rules and engaging in protectionist practices. The move is widely seen as a strategic warning, particularly as the U.S. considers easing tariffs on Canada and Mexico while maintaining its trade war with China.
According to analysts, Beijing’s response aligns with its past trade strategies, particularly its 2019 trade dispute with Australia, where economic sanctions were used as leverage to influence political decisions.
Impact on Canada & Potential Political Ramifications
Canadian Prime Minister Justin Trudeau defended the initial tariffs, arguing they were necessary to counter China’s state-driven overproduction, in line with measures taken by the U.S. and the European Union.
However, China’s decision to exclude canola from its tariff list suggests it may be holding back in anticipation of political changes in Canada. With Canadian federal elections approaching in October 2025, some experts believe Beijing is waiting for a potential shift in leadership before reassessing trade relations.
What’s Next? A Growing Trade Standoff
The latest escalation adds another layer of complexity to the global trade landscape, already under pressure due to U.S.-China tensions, supply chain disruptions, and geopolitical instability.
Whether Canada will retaliate further or seek diplomatic negotiations remains to be seen. Meanwhile, global markets are closely watching the situation, as any prolonged dispute could significantly impact Canada’s agricultural sector and China’s food supply chain.