Growing canola requires meticulous management. The small seeds are sensitive to moisture, extreme temperatures, and weed competition. However, the real challenge lies in navigating the diplomatic landscape to deliver the product to customers. The United States is the largest market for Canadian canola, followed by China. In 2024, the U.S. encouraged Canada to impose 100 percent tariffs on Chinese electric vehicles as part of its trade conflict with Beijing. However, the Trump administration's unpredictable stance has prompted the Canadian government to seek alternatives to its reliance on the U.S. market.

In response to the U.S. tariffs, China has imposed a 76 percent tariff on Canadian canola. This situation presents a dilemma for Prime Minister Mark Carney, who must find a way to lift China's canola duties without alienating the U.S. A report from a group of experts on Canada-U.S. relations, which included former national security adviser Vincent Rigby and ex-defence minister Perrin Beatty, suggested that Canada should pursue a policy of "selective engagement" with China. The authors warned that too much independence in Canada’s China policy could provoke retaliation from Washington, while excessive alignment with the U.S. could undermine Canadian sovereignty and efforts to diversify economic partnerships.

Carney may feel frustrated by this ambiguous guidance. The report does not specify how Canada can achieve what it calls "inconspicuous independence." However, Carney appears to be exploring a potential agreement with Beijing. Following a call with Chinese Premier Li Qiang in June, relations between Canada and China have shown signs of improvement.

On Friday, Carney announced a suspension of Canada’s electric vehicle (EV) mandate, which required that 20 percent of all cars sold next year be zero-emission vehicles or plug-in hybrids. This suspension will last for 60 days while the government reviews options to make electric vehicles more affordable. Much of this announcement focused on protecting Canadian agriculture and seafood industries from Chinese tariffs. Reporters questioned whether the government might consider lifting the EV tariff in exchange for access to Chinese markets for canola. Carney indicated that Canada has begun "intensive engagement" with China, primarily concerning canola and seafood, and suggested that discussions could expand.

Lifting the EV tariff could help Carney reduce transportation emissions and would likely be welcomed in China, which imported $4 billion worth of Canadian canola before the tariffs were imposed. China is eager to position itself as a reliable trading partner amid the ongoing U.S. trade tensions, despite past issues such as intellectual property theft and diplomatic conflicts.

Support for removing the EV tariff has come from Saskatchewan Premier Scott Moe, who is currently in China with Carney’s parliamentary secretary, Kody Blais, to discuss canola trade. Alberta Premier Danielle Smith has also advocated for the removal of the duty, arguing that Canada can maintain separate relationships with both the U.S. and China. However, this theory remains untested. The U.S. may view the importation of inexpensive Chinese EVs into Canada as a potential loophole to access the U.S. market, which could lead to additional tariffs on Canadian canola. The threat posed by heavily subsidized Chinese vehicles, such as the BYD Seagull, which retails for $7,800 in China, looms large over the auto industry on both sides of the border.