Collateral damage: China's anti-dumping case against Canadian canola

Abstract

In September 2024, China launched a dumping investigation against imports of Canadian canola. The announcement is the latest move in a series of trade disputes between the two countries and is widely seen as retaliation for Canadian tariffs on Chinese electric vehicles. This paper examines the institutions that govern the dumping investigation and the likely price effects stemming from China's announcement. The investigation will be conducted exclusively within China and appeals to the WTO can only be made on the basis that the Chinese investigation violated WTO rules. Such investigations typically sustain the finding of dumping. Given that Chinese imports of canola seed accounted for 23% of Canadian production in 2023, anti-dumping duties could significantly disrupt trade flows. However, the impact of anti-dumping measures on Canadian canola prices may be mitigated through trade diversion, increased domestic processing, and the pass-through of duties to Chinese importers.