China has unveiled retaliatory tariffs on over $2.6 billion worth of Canadian agricultural and food products, responding to trade restrictions Ottawa imposed in October. This move marks another front in an escalating trade battle, largely influenced by U.S. President Donald Trump's tariff policies.

Announced by China's commerce ministry, the new levies—set to take effect on March 20—mirror the 100% and 25% import duties Canada previously placed on Chinese electric vehicles, steel, and aluminum products. However, Beijing notably excluded canola, one of Canada's key exports to China, which remains under anti-dumping investigation. Analysts suggest this omission signals China's willingness to keep trade negotiations open.

Some experts see the tariffs as a warning to Canada, particularly in light of the Trump administration’s stance on trade. The U.S. has indicated it may ease its own 25% tariffs on Canada and Mexico if they impose an additional 20% duty on Chinese goods, part of broader efforts to curb fentanyl exports.

"Canada’s actions blatantly violate World Trade Organization rules and represent a typical act of protectionism that severely damages China's legitimate interests," the commerce ministry stated.

The new tariffs include a 100% duty on over $1 billion worth of Canadian rapeseed oil, oil cakes, and peas, alongside a 25% tariff on $1.6 billion in aquatic products and pork.

Dan Wang, China director at Eurasia Group, described the move as strategic, arguing, "China is reminding Canada of the risks of aligning too closely with U.S. trade policy." She added that China's delayed response to Ottawa’s October tariffs likely stems from its focus on ongoing trade disputes with the U.S. and European Union.

Canadian officials have yet to comment on the new measures. However, Prime Minister Justin Trudeau previously justified Ottawa’s tariffs as a response to China’s state-driven industrial overcapacity, aligning Canada’s stance with that of the U.S. and EU.

Meanwhile, Beijing launched an anti-dumping probe into Canadian canola exports in September. Given that more than half of Canada’s canola exports—valued at $3.7 billion in 2023—go to China, analysts believe Beijing may be leaving room for future negotiations by not including canola in the latest tariff list.

With Canada’s next national election set for October 20, China may also be waiting for a potential shift in Ottawa’s leadership before considering any reset in bilateral trade relations.

China remains Canada’s second-largest trading partner, with $47 billion in Canadian exports heading to the Chinese market in 2024. The new tariffs could have a significant impact, particularly on Canada’s pork industry, which relies heavily on China for specific exports, such as pig heads, that lack alternative buyers.

“This will be felt across the industry,” said Chris Davison, CEO of the Canola Council of Canada, calling for government support to mitigate the fallout.

Analysts also point to Beijing’s past actions against Australia, which faced years of trade restrictions after calling for a COVID-19 origins probe. China only lifted those bans in 2023, a year after Australia changed its government—a strategy some believe Beijing could replicate with Canada.