Just as Canada and China appeared to be cautiously rebuilding their trade relationship, Beijing has introduced a new irritant steep preliminary tariffs on one of Canada’s agricultural exports.
China’s Ministry of Commerce announced on June 30 that importers of Canadian pea starch would face a 73.5 percent security deposit requirement at Chinese customs, effective July 1. The measure follows a nearly year-long anti-dumping investigation that Beijing launched in August 2025, which concluded that Canadian producers had been selling pea starch in China at artificially low prices, causing measurable harm to Chinese domestic industry.
Pea starch a fine white powder derived from yellow peas and commonly used as a thickening or binding agent in processed foods had found a solid market in China. According to Statistics Canada trade data, China ranked as the second-largest buyer of Canadian starches in 2025, trailing only the United States.
Canada’s Global Affairs department acknowledged the development but sought to downplay its economic scale. Spokesperson John Babcock noted that year-to-date Chinese imports of pea starch from all sources remained below $10 million, describing it as “a relatively small import market for China,” even while conceding the product holds more significance for Canadian producers. Officials said they are working with the industry to assess the full impact.
The timing of the announcement raised eyebrows in Ottawa. The tariffs were unveiled just days after two federal ministers Industry Minister Mélanie Joly and Culture Minister Marc Miller had separately traveled to Beijing in recent weeks to strengthen bilateral ties. Chinese Foreign Minister Wang Yi had also made a rare visit to Canada in late May as part of the broader diplomatic thaw.
The pea starch investigation itself was originally launched on the same day China announced preliminary anti-dumping duties on Canadian canola a move that came amid a broader trade standoff between the two countries that began in late 2024. That conflict was triggered after Ottawa imposed a 100 percent surtax on Chinese electric vehicles, along with 25 percent duties on Chinese steel and aluminum, steps it said were necessary to protect Canadian workers from unfair competition.
China retaliated with tariffs across a range of Canadian agricultural goods, before Prime Minister Mark Carney’s visit to Beijing in January helped defuse some of the tension. Under the arrangement reached during that trip, Canada agreed to lower its EV tariff from 100 percent to 6.1 percent for an initial 49,000 vehicles annually, with access for up to 278,989 Chinese EVs over five years. In return, China reduced tariffs on canola seeds from roughly 85 percent to about 15 percent and suspended until the end of 2026 its 100 percent tariffs on canola meal and peas and the 25 percent tariffs on lobster and crab.
Canada’s automotive industry has been sharply critical of the EV concessions, arguing the influx of Chinese vehicles will undercut domestic production and create data security risks, given Beijing’s potential access to connected vehicle systems.
The Conservative opposition wasted little time drawing conclusions from the latest tariff announcement. In a joint statement released June 30, MPs John Barlow, Stephanie Kusie, and Eric Duncan argued the development exposed fundamental weaknesses in the government’s approach to China. “As Conservatives warned, there was no guarantee these trade barriers would be permanently, immediately or completely eliminated,” they said, calling the broader “strategic partnership” with Beijing including the EV import deal “reckless.”
The episode underscores the inherent fragility of the Canada-China trade reset. While diplomatic channels have reopened and some tariff relief is in place, the reappearance of punitive measures on niche agricultural products signals that the underlying tensions are far from resolved and that Canadian exporters remain exposed to Beijing’s leverage.
