China has set a preliminary anti-dumping duty of 75.8% on Canadian canola imports from Thursday, escalating a trade row that began after Ottawa imposed tariffs on Chinese electric vehicles last year.

The Ministry of Commerce said on Tuesday its investigation had found Canada’s canola industry benefited from subsidies and preferential policies. Canada rejected the finding, saying it does not dump canola and was “deeply disappointed” by the decision but remained open to talks.

International Trade Minister Maninder Sidhu and Agriculture Minister Heath MacDonald said Ottawa was committed to “fair market access” and stood ready for “constructive dialogue” with Beijing.

The Canola Council of Canada said the duty would effectively close the Chinese market, which bought almost C$5 billion (about $3.64 billion) of Canadian canola in 2024. China is the world’s largest importer of the crop, also known as rapeseed, and sources most of its supply from Canada.

ICE November canola futures fell 6.5% to about $650.30 per metric tonne after the announcement. Analysts said the tariff would be hard to offset quickly, although Australia — the second-largest exporter — could gain from improved access following a four-year halt in shipments to China.

The move marks a shift from the more conciliatory tone struck in June, when China’s Premier Li Qiang told Canadian Prime Minister Mark Carney there were “no deep-seated conflicts of interest” between the two countries. Beijing has also launched new anti-dumping probes into Canadian pea starch and imposed provisional duties on halogenated butyl rubber.

A final decision could confirm, change or overturn the provisional rate. Traders said it remained unclear whether the duty was a negotiating tactic or a long-term measure.

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