The recent de-escalation of trade tensions between Canada and China is expected to provide relief for Canadian agricultural exporters, particularly in the Prairies and coastal regions. China will reduce tariffs on Canadian seafood, peas, and canola meal, while Canada will lower tariffs on imports of Chinese electric vehicles. However, uncertainties remain regarding the durability of this truce and its implications for the Canadian auto sector, reports Salim Zanzana from Royal Bank of Canada (RBC).

Trade tensions ease, but questions remain

"The removal of tariffs on seafood, peas, and canola meal is expected to provide meaningful relief to the Prairies, parts of Atlantic Canada, and B.C.—regions that have, so far, not been able to fully offset export losses. For these provinces, the tariff removals significantly reduce downside risks to our forecasts this year."

"For the Prairies, the reduction in the tariff rate on canola seed from 75.8% to 15% marks a meaningful improvement, though the remaining levy may still pose some friction."

"The truce provides some added confidence heading into the 2026 seeding season with canola prices tracking broadly in line with levels observed at this time last year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)