The 2026 FCC Food and Beverage Report states sales among food and beverage manufacturers are predicted to rise by 0.8 per cent while volumes fall by 0.7 per cent, the fourth straight year of decline. It notes sales growth will likely be driven by higher prices, not higher consumption.

WHY IT MATTERS: With trade tensions still disrupting global supply, prices could fluctuate this year, affecting consumers’ choices.

FCC chief economist Craig Johnston said this disparity speaks to the issue of consumer purchasing power.

“Higher food prices over the past several years are really weighing on households’ budgets,” he said in an interview. “They’re making more cost-conscious decisions.”

“This is actually a headwind for consumption and a headwind for volumes.”

He said any upstream changes will no doubt filter down to Canadian producers. Some challenges are shared across sectors.

“When we think about common elements, you can think about the tariffs, the elevated input costs, generally,” he said.

Margins are tight across the sector, including for farmers.

“We’re not seeing massive improvements on margins within the food and beverage manufacturing sector to pre-COVID levels, and we’re not necessarily seeing that filter through to a broad-based increase in margins for primary ag.”

“The industry in general is still going through this adjustment period” he said, “and we do expect that to continue to 2026.”

Trade tensions still a factor

Canada will continue to grapple with trade uncertainty this year, including the recent instability caused by the conflict in the Middle East.

Forecasts for costs of goods in the Food and Beverage Report were made before the crisis, “meaning that if the commodity price surge persists beyond just a few months, there would be upside risks to those estimates.”

FCC had expected pressures on some inputs, such as cattle and hogs, to ease from 2025 highs, but surging energy prices due to the conflict make that less likely.

Costs of production up

Production costs for food and beverage manufacturers increased by two per cent in 2025, driven mostly by raw material costs.

“The increase in raw material costs was driven by disruptions that constrained availability and raised prices,” the report states.

“Some examples from 2025 include avian influenza impacts on poultry … tariffs that increased the cost of imported aluminum packaging and historically low cattle herd sizes across North America.”

Costs across sectors

The report also breaks down costs associated with sub-sectors of food and beverage processing.

In grain and oilseed milling, sales were uneven in 2025 but improved by the fourth quarter. 2026 shows signs of a rebound in sales and volumes.

Large carryover of canola stocks is expected to keep prices under pressure in 2026. Canola prices are expected to fall by 3.1 per cent in 2026.

The report suggested demand for Canadian maple syrup and honey has continued to increase in the global market.

In the dairy sector, 2026 will likely see a 3.6 per cent increase of product manufacturing sales over 2025. Processors are also expected to pass along costs from the producer price increase for unprocessed milk to consumers.

In the meat manufacturing sector, FCC forecasts sales up 1.6 per cent and volumes down by 5.6 per cent.

Tight supplies of live animals, due largely to disease outbreaks, drove prices up in 2025. According to the report, “2026 will likely see another year where price, not volume, drives sales upward.”

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Here’s everything you need to know about CUSMA, the upcoming review process and what it could mean for the agriculture sector.

WHY IT MATTERS: The review of CUSMA could set the stage for a new era of trade and tariffs between Canada and the U.S.

CUSMA replaced the North American Free Trade Agreement (NAFTA), which was active from 1994 to 2020. The current trilateral agreement allows producers in all three countries to trade with each other in a mostly tariff-free environment.

U.S. President Donald Trump has consistently expressed his displeasure with CUSMA despite the fact that it was negotiated during his first administration.

Prime Minister Mark Carney has also claimed the relationship Canada thought it had with the U.S. is over, signalling a possible new era in North American trade.

According to Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, it is unlikely the three countries will return to the original mode of tariff-free trade under CUSMA.

“It sounds like the Americans are not in a compromising mood,” Leblond said. “It sounds like, ‘Okay, we’re going to put the gun to your head, and you’re going to give us what we want’.”

U.S. could abandon CUSMA with minimal legal consequences

Any of the three parties may leave the agreement as long as they provide six months’ notice, but Leblond said nothing is stopping the U.S. from taking more drastic action.

He also said there is nothing forcing the parties to start negotiating on July 1, the official start of the review.

“The reality is … the U.S. can just pull out and say, ‘Yeah, as of tomorrow, we are not applying (CUSMA) anymore,” said Leblond. “We’re pulling out and we don’t care about the six months’ notice’.”

“The sort of attitude would be, ‘well, just sue us’.”

If Canada and Mexico were to sue, a panel of arbitrators would likely rule the U.S. at fault and give permission for the two countries to retaliate with tariffs.

It would still be on Canada and Mexico to decide how to react.

“It’s a bit of a moot point where yes, the U.S. legally has to give notice, but in practice, they can do what they want.”

It leaves Canada in a precarious place, especially as the terms of the agreement may not feel permanent.

“The Trump administration ultimately cannot be trusted,” Leblond said. “And therefore, yes, we can negotiate, we can try to come to a deal, but we have no guarantee whether that deal will be respected. And even existing deals are not being respected.”

U.S. may split Canada and Mexico to weaken negotiating leverage

Leblond said the U.S. could push for bilateral negotiations instead of trilateral, meaning individual meetings with Canada and Mexico.

This could weaken the leverage Canada and Mexico would otherwise have working together.

Leblond said there are three likely options.

“One is really trilateral negotiations, comprehensive,” he said.

“There’s the (option) we renew CUSMA, but the U.S. negotiates bilaterally with Canada, bilaterally with Mexico, and then they try to fit that within the existing CUSMA.”

Or the countries could make bilateral deals outside of CUSMA.

There is precedent for this, as the U.S. recently negotiated a new deal with South Korea which goes against the countries’ existing agreement. The free trade agreement is still there, but it’s superseded by the new deal.

“Is that what the Americans are going to try to push with Canada on the one hand and Mexico and the other? It’s very possible,” Leblond said.

The ever-present possibility of the U.S. pushing more tariffs on Canada should be motivation for the government to seek other trade deals in the interim, he added.

Carney and other government officials have recently taken several trips to countries like India and Vietnam.

Longer-term, reducing dependency on the U.S. is a good idea, Leblond said.

“Even if we have a deal, let’s say some kind of renegotiation, a deal that we reach with the U.S., what’s the guarantee that that deal is going to hold? There is none.”

Congressional approval could limit Trump’s options

Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance (CAFTA), said it’s unlikely Trump will pull out of the agreement completely.

Under the American system, the president would need congressional approval for major changes. Harvey said this could be a problem for Trump, who is already seeing pushback on his tariffs including a recent Supreme Court challenge.

“Significant changes to the treaty would require going to Congress, and we haven’t seen the administration be all that interested in going to Congress with trade agreements,” Harvey said.

There could also be disagreement within the administration’s base. Harvey said in the two trade missions it took to Washington, D.C., last year, CAFTA started to see increased doubt about the tariff agenda amongst Republicans, particularly in agriculture states.

U.S. producer groups have also shown support for a CUSMA renewal.

“That’s really positive, because first, it’s our direct counterparts in the United States,” Harvey said. “Second, the agri-food sector, let’s face it, they tend to be supporters of President Trump. So, it’s a positive thing for supporters of President Trump to be so in favour of the agreement.”

“Tariffs mean increased cost for consumers, for producers,” he said. “We’ve been working hard at making sure that decision-makers understand that, and what we’ve seen in Washington is that they do, and it’s great to see the U.S. ag sector being sold about it.”

Trump has also protected the agri-food elements of the agreement. When the president imposed tariffs on Canada, CUSMA-compliant agri-food goods were exempted.

Full renewal with minor tech updates is best outcome for Canada

Harvey said the best-case scenario for Canada would be a full renewal with some minor updates on agricultural technology, but “just renewal with no changes at all would be a great-case scenario.”

The deal works well for the agri-food sector.

“It’s one of the best agreements in the world,” Harvey said. “We’ve got three countries working together, highly integrated supply chains, highly integrated markets. That’s something that we need to protect.”

It’s still likely Trump will hardball in the initial negotiations.

“He has a style that attracts attention to his demands,” Harvey said. “His demands are often quite high at the beginning of a negotiation and often change quickly.”

Leblond also called it a best-case scenario for Canada to maintain the current terms, but suspected the U.S. would continue to push for more access in Canada, particularly in supply-managed sectors.

“If we can play for time and try to maintain the status quo, to me that would be the best option for now for Canada,” he said. “And hopefully then, … for a lot of the agricultural goods that we export to the U.S., they will continue to be exported without tariffs because we meet the rules of origin.”

That’s why both sides seem to be pushing for “just don’t make things worse,” Leblond said.

“Talk, engage, negotiate, but don’t look for a quick deal,” he said. “That that would be my view.”

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WHY IT MATTERS: Conversations between Canadian and American agriculture groups could help set a tone ahead of the CUSMA review this summer.

Hoekstra spoke at the Canadian Crops Convention in Toronto on March 12.

He said tariffs are likely to stay on as cost of doing business in the American market. Canada should “do everything they can to get into the lowest tariff buckets.”

“You can make compelling cases for us to do business with Canada and Canada to get the lowest tariffs of any trading partner in the world,” Hoekstra said.

U.S. and Canadian businesses both need to advocate for that relationship.

Cross-border relationships

Some in the Canadian agriculture sector say that advocacy is already underway.

Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance said many Canadians have been advocating for cross-border business relationships. Last fall, CAFTA led a trade mission to Washington D.C. involving 12 national industry groups. The group’s goal was to highlight the importance of renewing the Canada-U.S. Mexico Agreement.

Pierre Petelle, CEO of CropLife Canada, said he has seen U.S. farm groups openly support CUSMA over the last six months — something not common in the early days of the second Trump presidency.

“That puts us in a much, much better position,” he said.

Canada shouldn’t overestimate its value: Hoekstra

When negotiating trade, Hoekstra said Canada must not overestimate its value to the American market.

“We don’t wake up in the morning worried about Canada,” he said. “You don’t find Americans advocating … ‘boycott Canadian products.”

“When you walk into the negotiating team, or you get on TV and you say, ‘America needs our fill-in-the-blank,’ whatever commodity you’re talking about, you’re going to get a certain kind of response,” Hoekstra said.

“Because for just about everything that you bring in, it’s kind of like, ‘no, we really don’t.’”

The U.S. has done a good job of diversifying its markets and cultivating long-term relationships said Darcy Pawlik, executive director of the Wheat Growers Association. This gives some truth to the idea it doesn’t need Canadian imports.

“They’ve done the diversification of their procurement already,” Pawlik said. “Canada, we have really not carried the ball in a mature way, from a trade perspective internationally, from diversifying markets.”

Canada may have some commodities American need, but Pawlik said in many cases it has found other options.

‘We should always aim for free trade’

Hoekstra suggested pitching why doing business with Canada is a “phenomenal deal” for the United States.

“You will get a much different response in Washington than coming in and saying, ‘you absolutely need our stuff.’”

A compelling case could land Canada in the lowest tariff bucket, the ambassador said.

Being in the lowest bucket shouldn’t be Canada’s goal, Pawlik said.

“We need to always aim for zero-tariff,” he said. “We should always aim for free trade.”

“If there’s some points of negotiation that the Canadian government just can’t find a way to work together on and we end up in that lowest tariff bucket, then so be it. But we should never start from a place of being OK with some tariffs. We’ve got to aim for zero.”

Integration of supply chains a key bargaining point

Entering negotiations with a “we have what you need” approach could indeed be harmful, as it will only upset Trump and his administration said Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, in an email to Glacier FarmMedia.

However, the U.S. is not entirely self-sufficient.

“Yes, Canada has some of what the U.S. needs, but we’re not the only ones,” Leblond wrote, adding the U.S. has more leverage than Canada on this issue.

Petelle said it may be important to consider the integration of Canada-U.S. supply chains as opposed to what goods one country needs over the other.

Whether crop protection products and seed, or processing and feed, the supply chain is “extremely integrated,” he said.

In the seed and crop protection sector, Canada probably needs the U.S. more than it needs Canada, Petelle said.

“We import a lot of our seed directly from the U.S. and other regions. A lot of the manufacturing of crop protection is done in the U.S. … so we’re pretty reliant on the input side for seed and crop protection.”

Canada and the U.S. “really produce food together,” Harvey said citing examples of beef crossing the border to be processed and Canadian wheat going to an American plant before being sent back to Canada.

“We’ve really got this deeply integrated production model, and it would be very negative for American interests for that model to be … gummed up,” he said.

American agri-food sector on board with CUSMA

“I think the most important thing is to have American interests who are in favor of the relationship,” Harvey said, “we’re seeing it really clearly that the American agri-food sector is in favor of continuing the treaty.”

In February, 40 American agricultural organizations formed a coalition to support CUSMA. Nearly 100 Canadian groups made a similar plea in December.

Petelle said this alignment between American and Canadian groups is a positive signal and could mean the beginnings of good negotiations between the two countries.

Despite his assertion there will always be a cost of entry in the American market, Hoekstra said the U.S. is interested in renewing CUSMA.

Pawlik said Canadian commodity groups should start talking with their U.S. counterparts ahead of the CUSMA review this summer.

“Wheat organizations talk to the wheat organizations, you know, and soybeans talk to soybeans… so that when they get to the negotiating floor, they can say, ‘hey, no problem. We’ve actually got industry leading these conversations. We’re figuring out ways to get along.’”

‘Get back to the table’

Hoekstra said negotiations around the trade agreement have been stalled by headwinds from Canada. He said there “hasn’t been a substantive discussion since the end of October” between the two countries.

Petelle said he saw things differently.

“It was interesting to hear the ambassador characterize it as ‘four months lost,’” he said. “Last time I checked, it was the U.S. that broke off the discussions.”

“We’ve had several months of nothing really moving, but I think that decision was theirs last fall,” he continued. “So, the first thing is to get back to the table and start having serious conversations, rather than through the media or through public statements by ambassadors and others.”

Pawlik said many Canadians would do well to have a better understanding of CUSMA and how tightly connected the two countries really are.

“The one thing that we continue to forget is that we are allies, right?” he said. “(We should) treat each other with maybe a little bit more respect than what we’ve been seeing to date, and that should be encouraged amongst all Canadians.”

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The paper, released ahead of this week’s triennial WTO Ministerial meeting in Cameroon, underscores the U.S. Trade Representative’s insistence on sweeping reforms that are in line with U.S. President Donald Trump’s trade agenda and allow for more plurilateral trade agreements and differentiated tariffs.

• U.S. Trade Representative Jamieson Greer is expected to attend the March 26-29 ministerial meeting in Yaoundé.
• USTR has already rejected one proposal for reforming the WTO.
• The meeting in Cameroon comes at a critical moment for the WTO as Trump continues to upend the tariff system.
• U.S. says adherence to the Most Favored Nation principle and tariffs negotiated decades ago precludes WTO members from differentiating among trade partners.
• Without naming China, USTR quoted a January speech by Greer in which he said that some countries structurally export more than they import to seek a “shortcut to growth at others’ expense.”
• “In sum, members need to explore options so that they can more easily adjust their tariffs in response to threats to their economies, including from countries that run persistent and large surpluses or drive imbalances by building and maintaining overcapacity,” USTR said.
• The World Trade Organization’s 164 members commit to treating other members equally so they can all benefit from each other’s lowest tariffs, highest import quotas and fewest trade barriers. This principle is known as Most Favored Nation treatment.

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Speaking on Thursday at the Canadian Crops Convention in Toronto, he said the U.S. believes CUSMA, known as USMCA in the U.S., has worked well but there have been no “substantive” talks with Canada since October.

The Canadian minister responsible for Canada-U.S. trade met with his counterpart, U.S. Trade Representative Jamieson Greer, last week.

“I think we want to get to an agreement, but we are facing some headwinds in the negotiations,” Hoekstra said, citing a lack of “substantive” discussions since October.

Hoekstra said:

• Canada should do everything it can to get into the lowest tariff buckets.
• The U.S. is looking for coalitions with countries that will make sure that if there are trade agreements, then the non-tariff trade barriers are removed.
• U.S. President Donald Trump has said there will be some tariff for getting access to the U.S. market so the Canadian government and businesses should make the case why it is beneficial for the U.S. to do business with Canada at the lowest tariff rate.
• Canada and the U.S. can also work more closely on energy. The U.S. already imports a lot of oil and natural gas from Canada, the U.S. processes much of this energy, and it would want to expand the partnership.
• Canada should also build a stockpile of critical minerals in Canada or the U.S. to use during emergencies. Canada has many critical minerals and it should develop a full supply chain to become an ideal partner for the U.S.

The office of the Canadian Minister Dominic LeBlanc, who is responsible for Canada-U.S. trade, said that
Canada remains committed to establishing a new economic and security relationship with the United States that will deliver for workers and businesses on both sides of the border.

“The Minister looks forward to further engagement with his American and Mexican counterparts over the coming months as we undertake the trilateral and bilateral review of the Canada-United States-Mexico Agreement.”

— Additional reporting by Promit Mukherjee in Ottawa

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The tariff rate for canola seed is 14.9 per cent, effective March 1, Global Affairs Canada said in a news release.

Canada and China struck an initial trade deal in January when Prime Minister Mark Carney visited Beijing. Canada agreed to reduce tariffs on Chinese electric vehicles in return for lower tariffs on goods like canola.

“Canada’s farmers, ranchers, and processors succeed when markets are open and trade is predictable,” said Minister of Agriculture and Agri-Food Heath MacDonald in the news release.

“The suspension and reduction of tariffs on agriculture products, in addition to the restoration of market access for Canadian beef, pet food and animal genetics exports to China, deliver real opportunities for Canadian producers, businesses and workers,” he added.

As of March 1, Canada implemented a quota of 49,000 Chinese electric vehicles and extended the remission of surtaxes for certain Chinese steel and aluminum products.

The announcement makes no mention of pork or canola oil.

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CUSMA replaced the North American Free Trade Agreement (NAFTA), which was active from 1994 to 2020. The current trilateral agreement allows producers in all three countries to trade with each other in a mostly tariff-free environment.

WHY IT MATTERS: The review of CUSMA could set the stage for a new era of trade and tariffs between Canada and the U.S.

U.S. President Donald Trump has consistently expressed his displeasure with CUSMA despite the fact that it was negiotiated during his first administration.

Prime Minister Mark Carney has also claimed the relationship Canada thought it had with the U.S. is over, signalling a possible new era in North American trade.

According to Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, it is unlikely the three countries will return to the original mode of tariff-free trade under CUSMA.

“It sounds like the Americans are not in a compromising mood,” Leblond said. “It sounds like, ‘Okay, we’re going to put the gun to your head, and you’re going to give us what we want.’”

Can the U.S. pull out of CUSMA?

Any of the three parties may leave the agreement as long as they provide six months’ notice, but Leblond said nothing is stopping the U.S. from taking more drastic action.

He also said there is nothing forcing the parties to start negotiating on July 1, the official start of the review.

“The reality is, … the U.S. can just pull out and say, ‘yeah, as of tomorrow, we are not applying (CUSMA) anymore,” said Leblond. “We’re pulling out and we don’t care about the six months’ notice.’”

“The sort of attitude would be, ‘well, just sue us.’”

If Canada and Mexico were to sue, a panel of arbitrators would likely rule the U.S. at fault and give permission for the two countries to retaliate with tariffs.

It would still be on Canada and Mexico to decide how to react.

“It’s a bit of a moot point where yes, the U.S. legally has to give notice, but in practice, they can do what they want.”

It leaves Canada in a precarious place, especially as the terms of the agreement may not feel permanent.

“The Trump administration ultimately cannot be trusted,” Leblond said. “And therefore, yes, we can negotiate, we can try to come to a deal, but we have no guarantee whether that deal will be respected. And even existing deals are not being respected.”

U.S. could face challenges in leaving the agreement

Michael Harvey, Executive Director of the Canadian Agri-Food Trade Alliance (CAFTA), said it’s unlikely Trump will pull out of the agreement completely.

Under the American system, the President would need congressional approval for major changes. Harvey said this could be a problem for Trump, who is already seeing pushback on his tariffs including a recent Supreme Court challenge.

“Significant changes to the treaty would require going to Congress, and we haven’t seen the administration be all that interested in going to Congress with trade agreements,” Harvey said.

There could also be disagreement within the administration’s base. Harvey said in the two trade missions it took to Washington D.C. last year, CAFTA started to see increased doubt about the tariff agenda amongst Republicans, particularly in agriculture states.

U.S. producer groups have also shown support for a CUSMA renewal.

“That’s really positive, because first, it’s our direct counterparts in the United States,” Harvey said. “Second, the agri-food sector, let’s face it, they tend to be supporters of President Trump. So, it’s a positive thing for supporters of President Trump to be so in favor of the agreement.”

“Tariffs mean increased cost for consumers, for producers,” he said. “We’ve been working hard at making sure that decision-makers understand that, and what we’ve seen in Washington is that they do, and it’s great to see the U.S. ag sector being sold about it.”

Trump has also protected the agri-food elements of the agreement. When the President imposed tariffs on Canada, CUSMA-compliant agri-food goods were exempted.

What’s Canada’s best-case scenario?

Harvey said the best-case scenario for Canada would be a full renewal with some minor updates on agricultural technology, but “just renewal with no changes at all would be a great-case scenario.”

The deal works well for the agri-food sector.

“It’s one of the best agreements in the world,” Harvey said. “We’ve got three countries working together, highly integrated supply chains, highly integrated markets. That’s something that we need to protect.”

It’s still likely Trump will hardball in the initial negotiations.

“He has a style that attracts attention to his demands,” Harvey said. “His demands are often quite high at the beginning of a negotiation and often change quickly.”

Leblond also called it a best-case scenario for Canada to maintain the current terms, but suspected the U.S. would continue to push for more access in Canada, particularly in supply-managed sectors.

“If we can play for time and try to maintain the status quo, to me that would be the best option for now for Canada,” he said. “And hopefully then, … for a lot of the agricultural goods that we export to the U.S., they will continue to be exported without tariffs because we meet the rules of origin.”

That’s why both sides seem to be pushing for “just don’t make things worse,” Leblond said.

“Talk, engage, negotiate, but don’t look for a quick deal,” he said. “That that would be my view.”

Bilateral vs. trilateral negotiations

Leblond said the U.S. could push for bilateral negotiations instead of trilateral, meaning individual meetings with Canada and Mexico.

This could weaken the leverage Canada and Mexico would otherwise have working together.

Leblond said there are three likely options.

“One is really trilateral negotiations, comprehensive,” he said.

“There’s the (option) we renew CUSMA, but the U.S. negotiates bilaterally with Canada, bilaterally with Mexico, and then they try to fit that within the existing CUSMA.”

Or the countries could make bilateral deals outside of CUSMA.

There is precedent for this, as the U.S. recently negotiated a new deal with South Korea which goes against the countries’ existing agreement. The free trade agreement is still there, but it’s superseded by the new deal.

“Is that what the Americans are going to try to push with Canada on the one hand and Mexico and the other? It’s very possible,” Leblond said.

The ever-present possibility of the U.S. pushing more tariffs on Canada should be motivation for the government to seek other trade deals in the interim, he added.

Carney and other government officials have recently taken several trips to countries like India and Vietnam.

Longer-term, reducing dependency on the U.S. is a good idea, Leblond said.

“Even if we have a deal, let’s say some kind of renegotiation, a deal that we reach with the U.S., what’s the guarantee that that deal is going to hold? There is none.”

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The pledges are part of the Trump administration’s 2026 Trade Policy Agenda, issued over a week after the Supreme Court struck down President Donald Trump’s tariffs under the International Emergency Economic Powers Act.

Here are some key details of the agenda:

• The U.S. will seek to fix deficiencies in the Canada-U.S.-Mexico trade agreement (CUSMA), including on regional rules of origin and challenges created by investment from non-market economies and industrial overcapacity.
• The U.S. will seek to manage bilateral trade with China for better balance and fairness and monitor China’s compliance with a trade truce reached last year.
• The Trump administration will work to strike new trade deals with partners and finalize framework deals with the European Union, India, Japan, North Macedonia, South Korea, Switzerland, Liechtenstein, Thailand and Vietnam.
• The U.S. will finalize deals with Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Indonesia, Malaysia and Taiwan, and enforce all of its agreements through existing trade laws.
• The U.S. will evaluate whether new “Section 301” unfair trade investigations are needed to address global overcapacity, abuses in seafood and fisheries, export-driven agricultural policies, pharmaceutical pricing and digital services taxes.
• The administration will seek to bring back to the U.S. supply chains for critical minerals, semiconductors, auto parts, pharmaceuticals, medical equipment, metals and energy technologies.
• The U.S. will seek to attract foreign investment while ensuring that this will not imperil national security.
• The U.S. will seek to advance its trade interests through the G7, G20, Organization for Economic Cooperation and Development and World Trade Organization.
• The Trump administration sees limited opportunities for WTO reform but will urge reassessments of “most favored nation” tariffs to pursue bilateral agreements.

— Reporting by David Lawder

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The announcement came a day after China said it would suspend some tariffs on Canadian agricultural products imposed during its trade spat with Canada.

WHY IT MATTERS: This final ruling lowers the effective tariff on canola seed to 14.9 per cent rather than the crippling 75.8 per cent tariffs imposed last March.

The final anti-dumping tariff was lowered to 5.9 per cent from a preliminary 75.8 per cent imposed in August, according to a statement from the commerce ministry. The levy will be effective from March 1 and will last for five years.

In addition to the anti-dumping duty, Canadian canola remains subject to China’s standard nine per cent import tariff, bringing the total effective duty to 14.9 per cent.

The outcome broadly aligns with Prime Minister Mark Carney’s expectations. After his visit to Beijing in January, Carney had said he anticipated a total tariff rate of around 15 per cent.

China was Canada’s second-largest market for canola in 2024.

Wheat Growers underscore need for market stability

The reduction in tariffs is a positive development for Prairie canola growers said Wheat Growers Association chair Daryl Fransoo in a statement on Monday. Many Prairie farmers grow canola alongside wheat as part of their cropping rotation.

However, past disruptions underscore the need for long-term market stability.

“China has restricted or closed its canola market several times in the past, often tied to broader political tensions rather than technical trade issues,” Fransoo said. “These repeated interruptions are a clear reminder of why our relationship with the United States remains essential.”

Safeguarding Canadian agriculture amidst the review of the CUSMA trade deal should be a national priority, the Wheat Growers said.

The organization also urged Canada to accelerate development of a domestic biofuel sector.

Wave of visits to Beijing

China’s decision comes amid a wave of visits to Beijing by Western leaders, including Carney, as U.S. President Donald Trump’s trade policies have strained Washington’s traditional alliances. China has sought to present itself as a more stable and reliable economic partner in contrast.

Carney went further than his European counterparts by securing a deal with China and signalling Canada’s ambition to play a leading role in a new global trade order aimed at reducing dependence on the United States.

China’s Ministry of Commerce said on Saturday that its probe determined that imported canola from Canada involved dumping and harmed China’s domestic rapeseed industry.

The new levies “can alleviate pressure on the domestic sector and help maintain healthy and stable development of the industry.”

The ministry added that the ruling was based on facts and evidence, and also took into account reasonable requests of the Canadian side.

“China is willing to work with Canada to continue deepening economic and trade cooperation between the two countries and enhance the well-being of the people on both sides,” the ministry said.

— Reporting by Ella Cao in Beijing and Shanghai newsroom

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China will suspend 100 per cent tariffs on Canadian canola meal and pea imports and will halt 25 per cent tariffs on lobster and crab imports from March 1 through the end of 2026, the finance ministry said in a statement.

The outcome broadly aligns with Carney’s expectations. But the Chinese announcement made no mention of canola seed tariffs, which Carney had previously said would be lowered by March 1.

WHY IT MATTERS: China is suspending what were crippling tariffs on Canadian canola meal and peas, however Friday’s statement made no mention of canola seed or pork.

Ottawa expected Beijing to lower canola seed tariffs to a combined rate of about 15 per cent from the current 84 per cent. A probe into Canadian canola is set to conclude on March 9, the Chinese commerce ministry has said.

“One thing we do know is that Chinese buyers have been booking Canadian canola cargoes for March already. That gives me a pretty high degree of confidence that they’re going to follow through on the reduced tariff rate,” said Even Rogers Pay, director at Beijing-based consultancy Trivium China.

Canola oil and pork were also not mentioned in the statement. But Beijing could still announce further adjustments by the March 1 deadline previewed by Carney.

China was Canada’s second largest market for canola in 2024.

The suspensions come amid a wave of visits to Beijing by Western leaders as U.S. President Donald Trump’s trade policies have strained Washington’s traditional alliances. China has sought to present itself as a more stable and reliable economic partner in contrast.

Carney went further than his European counterparts by securing a deal with China and signalling Canada’s ambition to play a leading role in a new global trade order aimed at reducing dependence on the United States.

During his China trip, Carney pledged to allow into Canada up to 49,000 Chinese electric vehicles at a tariff of 6.1 per cent on most-favoured-nation terms.

— Reporting by Ella Cao, Xiuhao Chen, Daphne Zhang and Lewis Jackson

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