There was cautious optimism in the Nova Scotia seafood industry when the news broke on Jan. 16 that China was expected to lift retaliatory tariffs on Canadian lobster and crab starting March 1 until at least the end of the year.
“There’s incredible optimism in the sector. This was a major pressure. We weren’t certain we would see a resolution in any frame of time within the space of this week but at the same time there’s a little bit of caution in the wind. This is just a 10-month agreement. We’re going to need to see something developed for Jan. 1, 2027,” said Kris Vascotto, executive director Nova Scotia Seafood Alliance.
Initial communications indicated Chinese tariff relief on seafood was only for lobster and crab.
“The tariff relief is only for lobster and crab, dozens of other seafood species continue to deal with the tariff, including coldwater shrimp, sea cucumber and geoduck,” said Geoff Irvine, executive director of the Lobster Council of Canada.
Vascotto said the exclusion of other seafood species from the tariff relief represents roughly about $100 million of exports from Nova Scotia.
“There is more work to be done, but as a first step this really demonstrates interest in their market, demonstrates the interest on the part of the Canadian government to help diversify and maintain those relationships. At the end of the day this is going to bring better value to all participants in the sector,” he said.
Irvine said the 25 per cent tariff combined with a weak Chinese economy caused Canadian lobster exports to drop by about 50 per cent from April to the end of September with some recovery in the fall that has yet to be quantified as the stats are late coming out.
“We expect that the removal of the tariff will allow us to compete more effectively and gain back our market share, but it is too early to know for sure. Overall, I expect it will improve confidence for buyers and harvesters alike and should increase prices as Chinese demand drives increased buying activity on wharves throughout eastern Canada,” said Irvine.
The tariff relief was the result of a week-long visit to the People’s Republic of China by Canada’s Prime Minister, Mark Carney. It was the first visit to China by a Canadian Prime Minister since 2017. A joint statement was issued on Jan. 16 by Carney and President of China, Xi Jinping, outlining the pillars of Canada and China’s new strategic partnership.
By March 1, 2026, Canada expects that China will lower tariffs on Canadian canola seed to a combined rate of approximately 15 per cent. China is a $4 billion canola seed market for Canadian producers, and this change represents a significant drop from current combined tariff levels of approximately 85 per cent.
Canada expects that Canadian canola meal, lobster, crab and peas will not be subject to relevant anti-discrimination tariffs from March 1 until at least the end of this year.
“Together, these results will help unlock nearly $3 billion in export orders for Canadian workers and businesses as they realize the full potential of the massive Chinese market of 1.4 billion people,” reads the statement.
In return, Canada will allow up to 49,000 Chinese electric vehicles (EV) into the Canadian market, with the most-favoured-nation tariff rate of 6.1 per cent. This amount corresponds to volumes in the year prior to recent trade frictions on these imports (2023–2024), representing less than three per cent of the Canadian market for new vehicles sold in Canada.
It is expected that within three years, this agreement will drive considerable new Chinese joint-venture investment in Canada with trusted partners to protect and create new auto manufacturing careers for Canadian workers, and ensure a robust build-out of Canada’s EV supply chain. With this agreement, it is also anticipated that, in five years, more than 50 per cent of these vehicles will be affordable EVs with an import price of less than $35,000, creating new lower-cost options for Canadian consumers.
During the Prime Minister’s visit, Canada and China secured new memorandums of understanding (MOUs) to reinforce cooperation on energy, combatting crime, cultural exchanges, wood products and food safety and animal and plant health. Canada has set an ambitious goal to increase exports to China by 50 per cent by 2030.
“At its best, the Canada-China relationship has created massive opportunities for both our peoples. By leveraging our strengths and focusing on trade, energy, agri-food and areas where we can make huge gains, we are forging a new strategic partnership that builds on the best of our past, reflects the world as it is today, and benefits the people of both our nations,” said Prime Minister Carney.
