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China announced on 8 March that it would impose 100% tariffs on canola oil and canola seeds (rapeseed) imported from Canada, putting the country and its new prime minister, Mark Carney, at the centre of trade battles on two major fronts, according to a "CEO Morning Brief" report citing a Bloomberg article.
Reports on 10 March said the Chinese measure, due to take effect on 20 March, came in response to tariffs imposed by Canada last year on Chinese-made electric vehicles, steel and aluminium.
Canada is also facing 25% tariffs on its exports to the United States, including canola seeds, oil and meal.
Rick White, president and CEO of the Canadian Canola Growers Association, said in a statement issued on 8 March:
"Canadian canola farmers are facing an unprecedented level of trade uncertainty in our two largest export markets, just weeks before the start of the planting season."
China is the top export destination for Canadian canola, a specific type of rapeseed distinguished by its low levels of erucic acid and glucosinolates.
Although the Chinese decision was broad in scope, no tariffs were imposed on canola seeds, which China imports in far larger volumes than canola oil or meal, according to "CEO Morning Brief".
The report also noted that China is conducting an ongoing anti-dumping investigation into imports of Canadian rapeseed, leaving the door open for further measures later on.
Analyst Dennis Voznesenski of the Commonwealth Bank of Australia said in a note:
"The decision not to impose tariffs on Canadian canola seed shows China's reluctance to narrow its options for sourcing oilseeds."
According to the report, China's rapeseed imports totalled 6.39 million tonnes last year, with most of the volume coming from Canada.
Chinese customs data also showed that China imported around 2.74 million tonnes of canola meal last year, with the United States as the main supplier.
Earlier this month, China imposed 10% tariffs on US goods such as soybeans, white corn, meat and dairy products, along with 15% tariffs on wheat, corn and cotton, in response to 25% tariffs announced by the United States on 4 March. The Chinese tariffs took effect on 10 March.
Source: Bloomberg