American Tariffs Will Have a Devastating Impact on Canada’s Canola Sector

The decision by the U.S. to impose a 25% tariff on canola grown in Canada and canola products will be felt across the entire canola value chain. This will have a devastating impact on farmers, resource suppliers, processing, and the export of canola, oil, and meal, said Chris Davison, President and CEO of the Canola Council of Canada (CCC).

The U.S. is Canada’s number one market for canola exports, as well as a market closely integrated with Canada’s canola industry. The total export value in 2023 was $8.6 billion, and in 2024 it reached $7.7 billion, with record-high volumes, including 3.3 million tonnes of canola oil and 3.8 million tonnes of canola meal.

“The uncertainty created by this situation continues to affect farmers as they approach planting for the 2025 crop. The harmful blow dealt by the tariffs will be felt by every farmer growing canola, starting with the price they will receive at delivery, and it will spread across the full range of their operations, ultimately reducing farm profitability,” said Rick White, President and CEO of the Canadian Canola Growers Association (CCGA).

Both groups stated that they will be “focused on strengthening Canadian-American trade relations and increasing the mutual benefits that the two countries gain from trading canola,” conducting advocacy efforts in the U.S. and working with the Canadian government to promote the interests of the canola sector.

“The canola industry is truly a win-win for both Canada and the U.S., and we must do everything we can to restore smooth, predictable, tariff-free trade of canola between our two countries,” the release stated.

In January, market analyst Oil World’s David Milke mentioned that the threat of U.S. tariffs is real, but there could be other markets for canola this winter and spring, which should help support prices.

One of the main alternatives, at least for canola seed, he identified was the European Union.

“Canola production in the EU is declining. EU stocks are down. We believe that imports of canola seed and canola into the EU will reach record levels — around 7.3 million tonnes,” said Milke.

According to Milke, Canada’s share of this import could be 1.4 million tonnes.

Tags: EU, Canada, rapeseed, USA, restrictions