Canada Negotiates Tariff Reductions on Canola Seed by China

China will lower tariffs on Canadian canola seed to a combined rate of approximately 15%

Mark Carney has concluded his visit to Beijing for high-level meetings with Chinese leaders, including Xi Jinping. The visit marked the first trip to China by a Canadian prime minister since 2017 and resulted in a joint statement outlining a new strategic partnership between the two countries. 

Carney surprised some Canadian farmers with at least a partial victory.  China and Canada reached a preliminary agreement to reduce tariffs and remove trade barriers on key Canadian exports.  

Tariffs on Canadian canola seed are expected to drop significantly by March 2026. Canada also anticipates that canola meal, peas, lobsters, and crabs will avoid certain tariffs for a defined period.  

The media release says: 

“By March 1, 2026, Canada expects that China will lower tariffs on Canadian canola seed to a combined rate of approximately 15%. China is a $4 billion canola seed market for Canadian producers, and this change represents a significant drop from current combined tariff levels of approximately 85%.” 

It goes on to say, “Canada expects that Canadian canola meal, lobsters, crabs, and peas will not be subject to relevant anti-discrimination tariffs from March 1, 2026, until at least the end of this year.” 

These changes could unlock billions of dollars in new export opportunities for Canadian producers and workers. 

However, no specific mention of canola oil or pork in the official media release. 

A central focus of the partnership is cooperation in energy, clean technology, and climate competitiveness. Both countries say they aim to reduce emissions while increasing investment in batteries, solar, wind, and energy storage. Meetings with business leaders highlighted opportunities to attract Chinese investment into Canada’s clean energy sector. 

The agreement also includes changes affecting electric vehicles. Canada will allow a defined number of Chinese electric vehicles (6.1%) to enter the Canadian market at a lower tariff rate. According to the media release, the rate of 6.1% “corresponds to volumes in the year prior to recent trade frictions on these imports (2023-2024), representing less than 3% of the Canadian market for new vehicles sold in Canada.” 

This move is expected to support new joint ventures in Canada, strengthen the domestic EV supply chain, create manufacturing jobs, and provide more affordable electric vehicle options for Canadian consumers. 

Canada had 100% tariff on EVs, which is what sparked the tariffs on canola. 

Looking ahead, Canada has set a goal to increase exports to China by 50 percent by 2030.  

The partnership includes plans to expand cultural exchanges and tourism. An agreement between Destination Canada and China Media Group aims to promote travel, alongside new visa-free access for Canadians visiting China. 

Photo Credit: PMO’s Office