Ottawa and Beijing have struck a deal to unwind punitive tariffs that have weighed heavily on Canada’s agricultural exports, most notably canola.
Under a preliminary agreement announced by Prime Minister Mark Carney Friday, China will reduce tariffs on Canadian canola seed by March 1, 2026, lowering the combined rate to roughly 15% from current levels near 85%.
The agreement also includes relief for other key agri-food products. Canadian canola meal, peas, lobsters and crabs are expected to be exempt from China’s so-called “anti-discrimination” tariffs from March through at least the end of 2026. Federal officials say the measures could unlock close to $3 billion in new export orders across agriculture and related sectors, with benefits extending beyond oilseeds to pulses, seafood, and downstream processing.
There was no specific mention of any tariff relief for Chinese imports of Canadian canola oil in the federal government statement, which has faced 100% levies since early 2025.
“At its best, the Canada-China relationship has created massive opportunities for both our people,” Carney said in a statement. “By leveraging our strengths and focusing on trade, energy, agri-food, and areas where we can make huge gains, we are forging a new strategic partnership that builds on the best of our past, reflects the world as it is today, and benefits the people of both our nations.”
For canola growers, the announcement marks a sharp reversal from the situation last summer – just prior to the 2025 harvest - when China imposed a 75.8% duty on Canadian canola seed shipments as part of an anti-dumping investigation. That move drew strong criticism from the Canola Council of Canada and the Canadian Canola Growers Association, which warned the tariffs threatened a market that absorbed nearly $5 billion worth of Canadian canola and products in 2024.
The deal includes a politically sensitive compromise in manufacturing. Canada will allow up to 49,000 Chinese electric vehicles per year to enter the Canadian market at a 6.1% most-favoured-nation tariff, replacing the previous 100% rate. The volume cap reflects pre-trade-dispute import levels and represents less than 3% of annual new vehicle sales. Ottawa says the deal is expected to encourage joint-venture investment in Canada’s EV supply chain while delivering more affordable electric vehicles for consumers over time.
Beyond canola, the government says the agreement could help resolve long-standing barriers affecting beef, pet food and other agri-food exports. China remains Canada’s second-largest agricultural customer, with roughly $13.4 billion in agri-food, forest and seafood sales in 2024.
Carney described the deal as a turning point in the Canada-China relationship, signalling a renewed push to expand agricultural trade and lift exports to China by 50% by 2030.
