The Canadian federal government has not yet finalized eliminating tariffs on Canadian goods such as canola, partially due to ongoing talks with Beijing regarding Chinese steel and aluminum. Agriculture Minister Heath MacDonald highlighted this as a reason for China agreeing to temporarily ease tariffs on certain Canadian agricultural products until the end of this year.
Canada imposes tariffs on Chinese steel and aluminum due to what Ottawa perceives as unfair trade practices by China, including extensive subsidization of its metal industries leading to artificially low prices that disrupt global trade.
Following the recent government visit to China, MacDonald stated that both Ottawa and Beijing are working on exemptions related to steel. These exemptions provide relief from tariffs on specific Chinese steel and aluminum products that are not readily available or in limited supply in Canada. The Canadian government has extended these exemption measures until the end of 2026.
MacDonald emphasized the need for further discussions to address the situation concerning steel and aluminum, ensuring alignment between China’s demands and Canada’s requirements. His office later emphasized that issues beyond steel and aluminum still need resolution, without specifying the exact concerns.
In a recent development, the Liberal government reached an agreement with Beijing to allow a significant number of Chinese electric vehicles into the Canadian market in exchange for reduced duties on Canadian canola products. Prime Minister Mark Carney hailed this as a significant agreement, with expectations of China reducing canola seed duties from 84 to 15 percent by March 1, and lifting tariffs on canola meal, lobsters, peas, and crabs until the end of the year.
MacDonald mentioned that China has swiftly moved to import Canadian canola seed and beef, with a Chinese importer ordering 60,000 tonnes of canola seed and a Canadian company preparing to ship its first batch of beef to China. This would mark the first time China purchases Canadian canola seed and beef since imposing restrictions on such products.
Despite the ban on Canadian beef in 2021 following an isolated case of bovine spongiform encephalopathy (BSE) in Alberta, MacDonald announced that China has lifted the ban on Canadian beef imports. Negotiations are ongoing regarding Canadian pork, as China is a major producer of its pork consumption, though there remains a market opportunity for Canadian exports.
The recent progress signals the start of potential further agreements between Canada and China, with both countries continuing negotiations to address outstanding issues and enhance trade relations.