China begins anti-dumping probe into Canadian rapeseed

BEIJING (Reuters) -China announced on Monday the start of a one-year anti-dumping investigation into imports of rapeseed from Canada, just weeks before Ottawa's 100% tariffs on Chinese-made electric vehicles and other products come into force.

There has been growing trade tension between Beijing and the West in recent weeks after Canada, the United States and the European Union opted to impose tariffs on imports of electric vehicles from China.

The inquiry will examine imports from Jan. 1 to Dec. 31, 2023, China's commerce ministry said in a statement, adding that preliminary evidence and information showed dumping of the oilseed, also known as canola, had taken place.

While noting that Canada adheres to "rules-based trade," Canadian Minister of Agriculture Lawrence MacAulay said the country's products meet the highest standards and its inspection systems are robust.

"I am deeply concerned by this announcement, and I want to be clear that our government will always support the agriculture sector as they pursue market access for their world-class products," he said.

Chinese President Xi Jinping met with Spanish Prime Minister Pedro Sanchez on Monday in a bid to avoid a broad trade war.

China has already launched an anti-subsidy investigation into dairy imports from the European Union and an anti-dumping investigation into EU pork imports.

"A trade war would benefit no-one," Sanchez said, adding he was seeking to create a level playing field in cooperation with Chinese companies.

China's commerce ministry said there was a causal relationship between the dumping of Canadian canola imports and actual damage to domestic industry following significant rises in the imports and falling prices.

More than half of rapeseed exported by Canada makes its way to China. The world's biggest oilseed importer purchased 5.5 million metric tons of canola in 2023, valued at $3.72 billion. Imports from Canada accounted for 94% of the total.

The investigation is "fundamentally different" from the discriminatory measures taken by Canada in violation of WTO rules, a spokesperson from the commerce ministry said in a Q&A session on Monday.

Canada, following the lead of the United States and European Union, will on Oct 1 impose a 100% tariff on imports of Chinese electric vehicles and a 25% tariff on imported steel and aluminium from China.

The announcement of Beijing's plan on an anti-dumping probe last week sent prices of Chinese rapeseed oil futures to a one-month peak.

The investigation will start effectively immediately, and should be completed before Sept. 9, 2025, although it may be extended for another six months under special circumstances, the ministry said.

The probe will also examine the industrial damage from these Canadian imports covering the period from Jan. 1, 2021 to Dec. 31, 2023, it said.

MacAulay had previously said China's move was "deeply concerning". China has also said it will initiate an anti-dumping investigation into some Canadian chemical products.

(Reporting by Mei Mei Chu, Siyi Liu and Beijing newsroom; Additional reporting by David Ljunggren in Ottawa; Writing by Nigel Hunt; Editing by Tom Hogue, Shri Navaratnam, Peter Graff and Lincoln Feast.)