China has retaliated against Canada by imposing new tariffs on agricultural and food products worth over $2.6 billion. The move comes in response to the tariffs Ottawa introduced in October, escalating trade tensions amid broader disputes influenced by U.S. trade policies under President Donald Trump.

Set to take effect on March 20, China’s tariffs mirror the 100% and 25% import duties Canada had previously placed on Chinese electric vehicles, steel, and aluminium. However, Beijing notably excluded canola—one of Canada’s key exports—possibly leaving room for trade negotiations.

Analysts suggest the tariffs serve as both retaliation and a warning, as Washington signals potential tariff relief for Canada and Mexico if they match U.S. duties on Chinese goods. The Chinese commerce ministry condemned Canada’s actions as protectionist and discriminatory, arguing they violate World Trade Organization (WTO) rules.

China’s new tariffs include a 100% duty on over $1 billion worth of Canadian rapeseed oil, oil cakes, and peas, along with a 25% duty on $1.6 billion worth of aquatic products and pork. Analysts believe the timing of China’s response is strategic, reminding Canada of the costs of aligning too closely with U.S. trade policy.

Canada had initially imposed its tariffs to counter what Prime Minister Justin Trudeau described as China’s state-directed industrial overcapacity, following similar moves by the U.S. and the European Union. In retaliation, Beijing launched an anti-dumping probe into Canadian canola imports, a market worth $3.7 billion in 2023.

While the canola investigation remains ongoing, its exclusion from the latest tariffs could indicate China’s willingness to negotiate, especially with Canada’s upcoming federal election in October. Some analysts speculate that Beijing may use a potential leadership change in Ottawa to reset relations, similar to how it approached Australia after a government transition there.

China remains Canada’s second-largest trading partner, with exports to the country totaling $47 billion in 2024. The tariffs are expected to significantly impact industries such as pork and canola, with Canadian officials and industry leaders calling for government support to mitigate the consequences.