China delays final ruling in canola dispute with top supplier Canada

Pumpjacks draw out oil and gas from well heads surrounded by Canola fields near Cremona, Alta., Monday, July 15, 2024. THE CANADIAN PRESS/Jeff McIntosh

BEIJING - China on Friday prolonged its probe into Canadian canola imports, buying six more months for negotiations that could ease a year-long trade dispute sparked by Ottawa’s tariffs on Chinese electric vehicles.

The Ministry of Commerce said the anti-dumping probe would now run until March 9, 2026, citing the complexity of the case, a statement showed.

Beijing, the world’s largest importer of canola, imposed preliminary duties of 75.8 per cent on Canadian canola seed imports in August. A final ruling could result in a different rate, or overturn the decision.

“The extension buys some time for both sides to seek a negotiated solution,” said Even Rogers Pay, an analyst at Beijing-based Trivium China who specializes in agriculture.

“Ultimately, the best case scenario for Beijing would be to strike a deal in which it drops the investigation and Canada lifts tariffs on Chinese vehicles and metals. But given the complexities involved as Canada tries to keep its U.S. trade relationship stable, that will be easier said than done.”

Canada, the world’s largest exporter of canola, shipped almost $5 billion of canola products to China in 2024, about 80 per cent of which was seed. The steep duties on canola seed, if they remain in place, would likely all but end those imports.

China, which relies on Canada for nearly all of its canola seed supplies, also imposed tariffs on canola oil and meal in March. Canada, in turn, has imposed tariffs on Chinese steel and aluminum.

Ottawa has grown increasingly anxious about losing a key customer, especially as China appears to be pivoting towards Australian supplies.

On Wednesday, Prime Minister Mark Carney said he and other senior officials would work to resolve the canola dispute.

In July, Reuters reported that Canberra is close to an agreement with Beijing that would allow Australian suppliers to ship five trial canola cargoes to China.

The following month, Chinese state-run trading firm COFCO booked the first new-crop Australian canola, marking China’s first imports from Australia since 2020.

Reporting by Ethan Wang and Ryan Woo; Editing by Kevin Liffey and Sharon Singleton, Reuters