The Decibel - The crop caught in the crosshairs of the Canada-China trade war

Episode Date: October 17, 2025

This week, Foreign Affairs Minister Anita Anand is visiting China as part of an effort to improve relations amid a trade war between Canada and China. It began last year, when Ottawa imposed a 100-per-cent tariff on Chinese-made electric vehicles. China responded by launching an anti-dumping probe into Canada’s canola imports, and later issued its own 100-per-cent tariff on Canadian canola oil, meal, and peas, followed by a 78.5-per-cent tariff on Canadian canola seed.Kate Helmore is the Globe’s agriculture and food policy reporter. She’s on the show to explain what’s going on with the trade war between Canada and China, and how tensions with the U.S. are contributing to an unstable situation for one of Canada’s most important crops.Questions? Comments? Ideas? Email us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

This week, Canada's Minister of Foreign Affairs, Anita Anand, is in Beijing. She'll meet with China's foreign minister on Friday. Trade tensions between Canada and China have been high over the last year. It all began about a year ago when Ottawa imposed 100% tariffs on Chinese-made electric vehicles. Kate Helmour is the globe's agriculture and food policy reporter. And China has retaliated by attacking our canola. industry. They have imposed 78.5% tariffs on Canadian canola seed, and they've imposed 100% tariffs on Canadian canola oil and meal. We've been focusing a lot on the trade war between

Canada and the U.S. with good reason. But canola is a $44 billion industry in Canada. And so this trade war with China is also one to pay attention to. China is Canada's second largest market for canola, second only to the US. And that market has also become a lot less stable. So today, Kate is on the show to unfurl what's going on with canola, why it's so important to the Canadian economy, and what's at risk in this high-stakes trade war. I'm Cheryl Sutherland, and this is the decibel from the Globe and Mail. Hi, Kate, thanks for joining us today. Hey, thanks for having me. So Kate, I think a lot of us are familiar with canola oil from the grocery store, but maybe not as familiar that this is a uniquely Canadian creation right down to its name.

So can you just tell us what exactly is canola? Canola is kind of Canada and oil together into one. That's the name there. Yeah, exactly. We developed it in the 1960s and 70s in Manitoba and Saskatchewan. And now Canada produces over 30% of the global supply of canola and accounts for 60% of the global trade of the product. So we're kind of the kingpins when it comes to this particular type of vegetable oil. And what is it used for? It's a really good question because there's a lot of

things that we use canola oil for or canola in general. So yeah, as you said, listeners will know it as the golden oil that you use for cooking. It has a really high heat point. So it's really good for like frying potatoes and stuff like that. But beyond that, there's also two other products. There is the seed and there's the meal. And so the seed comes. from those yellow flowers that you see associate with canola oil. And then we take that seed and we crush it. And when we crush it, we produce two products. One is the oil and one is the meal. And the meal is essential to agriculture and livestock. It's a great source of protein. So we use it to feed the dairy industry, for example. We export a lot of canola meal to the US every year. And we use that

to feed their dairy industry. Because it's a good protein, it can also be used in plant-based proteins, such as they're looking into turning it into like plant-based burgers or sausages, those kinds of things. And then the oil, we can take the oil and we can further refine it and we can turn it into biofuel. And before we'll get to that later, because it's kind of this whole of a complicated industry over there. But what you need to know is that it's really not, this is not a story about a crop that gives you some cooking oil. This is a story about a massive agricultural industry and one of our darlings and one of our most important agricultural industries. So let's talk about the size.

of the industry today in Canada. How big is it? Where is it grown? Kind of zooming out for a second, Canadian agriculture has historically been honestly pretty bad at further processing, right? We've never been known as, you know, who is of wood and drawers of water. That's kind of our thing. We export a lot of raw product. That is not the case in canola. We grow a lot of canola, you know, 40,000 farmers across the country. But we've also built up a massive further processing sector. So we have 14 crush and refining plants. A crush plant is, as it sounds, you crush the seed. And it's grown into a $43.7 billion industry.

It's a lot of money. Yeah, that generates around 206,000 jobs based on data collected by the Canola Council of Canada. And every year we process 13 million tons of seed. This is a heavy hitter. And where exactly are we seeing this crop being grown? Right. The number one province is Saskatchew. one. After that, it's Manitoba and Alberta. So really, it's a story of Western Canadian

agriculture. Right. And also, this is an exporting story, right? Because Canada is the largest exporter of canola in the world. Is that correct? Oh, absolutely. Yeah. We account for 60% of global trade. Wow. So the U.S. is the largest importer of Canadian canola. And we'll talk about that relationship in a bit. But let's bring in China, since this is where the trade tensions are. China is the second largest importer of Canadian conola. Why are they buying it? China is the second largest import of canola overall, but it's actually the largest import of canola seed. China has a pretty large scale, also canola crush capacity in their country. And it's because China is just this enormous market.

I mean, we're looking at a population of 1.4 billion people with a growing middle class. And a growing middle class wants a premium, good tasting vegetable oil. China also has an enormous livestock sector. They use the canola meal also to feed their animals, their pork and their... cattle. Can you put a dollar figure on that? Like, how much is China buying from Canada? In 2024, Canada shipped $4.9 billion worth of canola to China. Wow. And the lion share of that is seed. So now China has slapped a 100% tariff on our canola oil and 78.5% tariff on canola seed. Why are they after our canola? So this isn't really just a story about canola, right? It's a story about

different industries and two are really coming to the tension point here. On one hand is canola and on the other is the EV sector, the electric vehicle sector. Last year in 2024, in October, Ottawa imposed 100% tariffs on Chinese-made EVVs. Why do we do that? We did it because the Americans were doing it. And at the time we took for granted that the North American auto manufacturing sector was intuitively integrated. So if the Americans were doing something, we should do it Two. Auto manufacturers across North America are very concerned about growing presence of Chinese cars. Chinese EVs are cheaper and are arguably better. And our industry was just trying to get off the ground. And so to make sure you get off the ground, we need protection. This is the argument, right?

China pretty much immediately afterwards launched what we call an anti-dumping probe. What is that? Well, what is dumping? So the definition of dumping when it comes to trade, it kind of means when we export a product into a foreign market for a really low price and if that damages the domestic market that we're importing it into then it can be classified as dumping it's tied up in a bunch of different things often the argument will be that that product was somehow subsidized by the government and that makes an unfair trading practice for example let's say I'm an apple grower and the government pays me 70% of the cost of my production of my apple that means that I can sell my apples

for pretty cheap, right? It means I could go to the U.S. and sell a ton of apples, and I could out-compete the U.S. industry. And they would say that's dumping. The prices are lower. They're out-competing us, and it's unfair. Got it. Okay. So China is basically accusing Canada of dumping cheap canola into their markets. Is there any evidence that that's happening? No, there's no evidence that's happening. I mean, agriculture is always subsidized, has always helped and assisted by the government. There's no special assistance that is given to Canada's canola industry, and of course, basically every country in the world subsidizes their agricultural production. This is not unique to Canada. Dumping is sometimes a very legitimate concern,

but it's often a bit of a smokescreen for numerous different interests. So on one side, you could have an industry that wants more protection, doesn't want to have to compete with other countries that can produce for cheaper, and so that there might launch an anti-dumping probe, or a government could be trying to harm another nation because of geopolitical, tensions and they know they can attack that and they can get some leverage by attacking their industries. So these tariffs have been in place for a while now since March for the canola oil and then since August for the canola seed. What kind of impact has this had on farmers and the economy? So canola prices have been fluctuating and kind of unstable as we're

facing this. They dropped one dollar per bushel in the immediate aftermath of China's announcement in August. Is that a lot? Yeah, that could cost a farmer tens of thousands of dollars. Now, it's worth noting that canola prices are not at historic lows, right? This is a global commodity. It will find other markets to move into, and it will also find other ways into the Chinese market. I've heard sources tell me that Canadian canola is kind of making a bit of a pit stop in Saudi Arabia before it gets into China. So it's not all devastating doom and gloom, right?

Like, farmers are resilient, markets are resilient, trade routes. and flows are resilient. But what I will say is that it's been two months and they're frustrated. They're frustrated because they do not feel that Ottawa has prioritized their interests. For example, if President Trump imposed 100% tariffs on an industry that was really important to Ontario, auto manufacturing, maybe, for example, do you think that the Prime Minister would have not visited Washington for two months? There's questions from the opposition, and there's questions from farmers about why the

agricultural minister, why the prime minister has not been to Beijing yet. The Premier of Saskatchewan, Scott Moe, did go on a trade mission to Beijing, and he asked the prime minister to go with him, he asked the agricultural minister to go with him, and they did not. So there is this frustration because there seems to be a lack of prioritization, there seems to be a lack of urgency, there seems to be a lack of energy on this file, which farmers will turn around and say this is classic. This is typical. We fall victim to geopolitical tensions. We pull victim because you prioritized another industry and now you're not giving us the attention that we need in crisis. China announced this anti-dumping probe last year. You've had an entire year to prepare

for this. They were pretty predictable. We knew what they were going to do. Why are we being caught flat-footed? And then when we're flat-footed, why aren't we figuring it out? We'll be right back. So these canola tariffs are in place because Canada has a tariff on Chinese EVs. And the reasoning here is kind of to be in lockstep with the US, but also to protect the auto industry in Canada. And it sounds like within Canada, there's sort of a linking, but also a prioritization of industries going on, where the auto sector, more specifically EVs, are favored over canola. Do you have a sense of why the feds would keep these electric vehicle tariffs at the expense of the Knoll industry? Like, are these comparable industries?

That's a really good question. And it kind of requires that we take a beat to zoom out. Okay. When I look at the Knolla story, I see kind of free arenas of tension or conflict. The first is between two industries, canola versus auto manufacturing. The second is between two parts of the country, Eastern Canada and West. in Canada. And the last one is between two mammoths on the global stage, and that's the US and China. And the first one is, as you said, it's between canola and established agricultural

industry and EVs, which is perhaps the future of the auto manufacturing industry, which is really, really important for a lot of jobs across the country. But it's also important to note that we don't really know how much that EV sector is worth in Canada because it's a nascent sector, right? It hasn't really got off the ground. There's been billions of dollars in federal and provincial funding for the sector, and it's been plagued by bankruptcies. I mean, just this week, Stalantis announced that it would be moving its production of the Jeep Compass from Brampton, Ontario to Illinois. We don't really know how many people are employed in EVs. What we do know, though, is we do have that number of canola, because as we said earlier,

canola has been around since the 1960s and 70s. This is an established industry. We know there are more than 200,000 jobs. connected to this industry. We know there's 40,000 farmers. We know that they employ people where elevators for the seed. We know the railroads move this crop. We know that port infrastructure is required to ship it, export it.

It's a tough question. It's a question between an established industry and taking a bet on a future sector, a future industry. What have these provinces that grow canola? What have they said about these tariffs? That's a really good question because it brings in the second arena of the canola war that I would say. And that's between Eastern Canada, the auto manufacturing sector, and between West in Canada. Alberta, Manitoba, and Saskatchew and Western Canada will say that the federal government is prioritizing Ontario. Ontario is a vote-rich province.

It's a province where both the Conservatives and the Liberals fight for votes. West in Canada is pretty locked down in favour of one political party, especially rural Western Canada. and after the ambassador made their remarks last week, after the Chinese ambassador basically said, look, if Ottawa is willing to drop its tariffs on Chinese-made EVs, we'll drop our tariffs on Canadian agricultural goods. They laid it on the table. We did see Western premiers come forward.

On Wednesday, Manitoba Premier Wab Canoe told me that it's high time Ottawa start paying attention to Canadian agriculture and factoring it into its decision-making. And he said he's tired of, agriculture being subsumed by an all-consuming focus on the auto manufacturing industry. And then in an event on Tuesday night, Doug Ford came out and said, look, I hear what they're saying. I hear what Scott Moe. I hear what Knew is saying. But I've got to protect my interests. And we cannot let these EV tariffs drop. We have to protect our auto manufacturing sector, because

again, it's really important. It's a big driver of jobs. And that sector is also struggling right now, Right? Because it's facing a lot of problems with the trade disputes that we're having with the U.S., which brings me into the third arena of this whole Canola tension war thing. Yes, yes. Let's talk about the U.S. because the U.S. is actually our biggest buyer of canola. So what's going on on that front? Okay. So let's just play if this happens, right? If Ottawa concedes to Chinese demands and opens our market to Chinese-made EVs, this will go. directly against the interest of the US. And we don't know how President Donald Trump would react to that. He could come back at us with retaliatory tariffs for their actions. He could target our canola industry, for example, which as I said, the US is the first largest market. So that would be really bad news. We ship $7.7 billion of canola to the US. Five point six

billion of that is canola oil. It's a very important sector. And there's also some interesting stuff going on with the US and biofuel policy, which we'll get to in a second. So just hold the phone on that one. It could also be, though, that Trump would come after our auto manufacturing sector. Again, as I said earlier, the auto manufacturers in the US are very concerned about Chinese presence in this market. They might say, hey, if you're letting the Chinese in, we're going to put up barriers because we can't let the Chinese into our sector, into our market. And that would be devastating for Ontario's auto manufacturing sector, which is so intricately interwoven with the US. I mean, we move parts forward and back across that border consistently and constantly.

It's kind of a funny moment in time to pause and think about this. If we were faced with this choice two years ago, which we could have been under the Biden administration, it would have been painful, but it would have been a clear decision. China or the U.S. We would pick the U.S. The U.S. is our longstanding, most reliable trusting trading partner, and we do more trade with them than we do if anyone else. But times are different, right? The man who sits in the White House is not the same. And he has repeatedly since taking office, waged war on Canada's economy and threatened us with tariffs and pursued a mercantilist trade policy, which is against this idea of an integrated North American market, auto manufacturing, agriculture, whatever it is,

right? At least that's what he says, you know. So we are facing this really tough choice between two unreliable trading partners. That's an important word. They're unreliable. Unreliable being really important. Because to mention as well, China is no angel as far as a trading partner goes, this is not the first time that they have specifically targeted our canola products. In 2018, after Ottawa arrested Huawei executive Meng Wenzhou, China did also curtail and restrict canola imports into our country. That cost us a lot of money. So they do do this.

When there's a political tension between our two nations that have nothing to do with the industries at hand, they will use tariffs and trade barriers as a way to exert economic pressure to get what they want. That's a difficult situation. You mentioned biofuel. Can we get into that? What is that layer there? So biofuels are transportation fuels that are produced using crops.

So such as canola, such as corn, soybean, palm oil, that kind of stuff. They're seen as renewable because, you know, you can regrow it. You're not dragging something out of the ground. You're regrow in a crop. You're harvesting it. You're turning it into something that can be used in transportation such as cars, airplanes, you name it. Both Canada and the U.S. have basically renewable fuel polymers. policies that incentivize petroleum producers to mix more of that biofuel into their products.

The ambition of these policies is twofold. The first is clean energy. It's good for the energy transition. The second one is it supports farmers. It gives them a stable domestic demand for their goods. So that's a big part of Canada's canola industry. We also ship a lot of that stuff down to the US. Actually, we share $5.6 billion of canola oil to the US, which is largely for their biofuel industry. And we do that because they have a slew of tax incentives and carbon credits tied up. The petroleum users can receive if they use renewable fuels, right? The US is currently sitting on policies that might look at halving the value of the carbon credit should they use imported feedstock, imported crops.

And that would be an issue for a Canadian imports. That would be a big issue for us, right? Because that would basically be, we wouldn't be able to compete with the farmers of corn, for example, in the U.S. We could see demand in the states dry up. And the Environmental Protection Agency is poised to make that decision. Do we want to anger them by, you know, siding with the Chinese or conceding to the Chinese? especially if they could look to make these changes. We are torn between two lions in the global stage.

We are torn between the two largest economies out there. And our canola and Canada is right smack bang in the middle. How has Ottawa tried to help? In early September, the government did announce some measures, such as they announced increases to interest-free loans that would be available to canola farmers. And they said that they would be reviewing some of these clean fuel, standards and regulations. The industry responded to that and said it was wholly inadequate.

They argue that they shouldn't have to borrow their way out of this crisis, especially since it's not of their own making. And they also said that, you know, the changes to clean fuel regulations, this kind of stuff isn't moving fast enough. If we look at what Donald Trump is doing, he's increasing tax incentives, he's prioritized in the domestic market. Why isn't Canada doing the same thing? Why are we not moving faster? So Minister of Foreign Affairs, Anita Anand, is in China to mend ties with Beijing, especially around this trade war. Kate, what will you be watching, particularly when it comes to Canola? I would be looking for Anand to make comments on whether they're negotiating on the EV tariffs.

It's not a black or white equation. Maybe we could get what we wanted from China if we reduced the tariff from 100%. Right now, the tariff rate is 100% on EVs. What if we did 50%? What if we did 40%? What is Beijing? Beijing's put it on the table, but there's negotiating space in that. So what are the kind of conversation she's having? What is going to come out of that? That's what I'll be watching closely and I'll be watching President Donald Trump's reaction as well. As you said, trapped between two lions there. So it's very difficult.

Absolutely. Yeah. Well, Kate, we'll leave it right there. Thank you so much for being on the show. Thank you for having me. That was Kate Hellmore. The Globe's Agriculture, and Food Policy Reporter. That's it for today. I'm Cheryl Sutherland. Our producers are Madeline White,

Mikhail Stein, and Ali Graham. David Crosby edits the show. Adrian Chung is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening, and I'll talk to you soon.