China Retaliates Against Canada with New Tariffs Amid Escalating Trade Tensions

China has announced retaliatory tariffs on over $2.6 billion worth of Canadian agricultural and food products, escalating trade tensions following levies imposed by Ottawa last October.

The move, revealed by China’s Ministry of Commerce, is set to take effect on March 20 and mirrors the 100% and 25% import duties Canada placed on Chinese electric vehicles, steel, and aluminum products.

This latest development adds another layer to the ongoing trade war, largely influenced by U.S. policy. The Trump administration has hinted at easing its own 25% tariffs on Canadian and Mexican imports if they follow suit in imposing additional duties on Chinese goods over fentanyl-related concerns.

In a statement, the Chinese commerce ministry accused Canada of violating World Trade Organization (WTO) rules and engaging in protectionist measures that unfairly target Chinese industries.

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Under the new tariffs, China will impose a 100% duty on more than $1 billion worth of Canadian rapeseed oil, oil cakes, and peas. Additionally, a 25% tariff will be applied to $1.6 billion worth of Canadian aquatic products and pork.

Interestingly, canola—a major Canadian export—was left out of the tariff list, possibly signaling Beijing’s willingness to keep the door open for future trade negotiations. Canola exports to China were valued at $3.7 billion in 2023, making it a critical trade link between the two nations.

Dan Wang, China Director at Eurasia Group, sees the timing of China’s response as a strategic warning to Canada. “By imposing these tariffs now, China is reminding Canada of the consequences of aligning too closely with U.S. trade policy,” Wang explained.

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She also noted that China’s delayed response to Ottawa’s tariffs might have been due to limited administrative capacity, given its ongoing trade disputes with both the U.S. and the European Union. “Canada, being a lower priority, had to wait its turn,” she added.

Canadian Prime Minister Justin Trudeau justified the tariffs imposed in October as a countermeasure against what he described as China’s deliberate overcapacity strategy—an accusation echoed by both the U.S. and the EU. In response, China launched an anti-dumping investigation into Canadian canola imports, a case that remains unresolved.

Rosa Wang, an analyst with agricultural consultancy JCI, believes that China’s decision to exclude canola from the tariff list may be a strategic gesture. “Leaving canola out could be Beijing’s way of signaling an openness to negotiations,” she suggested.

Additionally, China may be anticipating a shift in Canada’s political landscape. With a federal election due by October 20, Beijing could be hoping for a new government that is more receptive to mending trade relations.

China’s approach to Canada mirrors its previous trade retaliation against Australia. In 2020, Beijing imposed sweeping tariffs and restrictions on Australian exports—including barley, wine, beef, coal, and lobster—after Canberra called for an investigation into COVID-19’s origins.

It wasn’t until 2023, a year after Anthony Albanese replaced Scott Morrison as Australia’s Prime Minister, that China began lifting these restrictions.

Analysts speculate that Beijing may use a similar playbook with Canada, waiting to see if a leadership change in Ottawa opens the door for a diplomatic reset.

With China serving as Canada’s second-largest trading partner—albeit far behind the U.S.—this latest escalation raises concerns about the long-term stability of economic ties between the two nations. In 2024 alone, Canada exported $47 billion worth of goods to China, according to Chinese customs data.