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Canadian farmers and agriculture companies are reeling after China placed a preliminary anti-dumping duty on Canadian %Canola imports of 75.8%.

Analysts say the move by authorities in Beijing escalates a year-long trade dispute that began with Canada's imposition of tariffs on Chinese electric vehicle imports.

Canada's federal government disputes the Chinese claims of dumping, saying in a news release that Canada does not dump canola and that it remains open to dialogue on the issue.

The Canola Council of Canada says that the sky-high import duty makes the Chinese market effectively closed for Canadian canola.

Canada exported nearly C$5 billion ($3.63 billion U.S.) of the oilseed crop to China in 2024.

The Chinese tariff on canola comes as Canada grapples with an ongoing trade dispute with the neighbouring U.S., which has slapped a blanket tariff of 35% on Canadian imports.

Canada's top canola meal and oil market is the U.S., while China buys the bulk of Canada's canola seed.

China, the world's largest importer of canola, sources nearly all of its supplies of the product from Canada.

Analysts say the steep duties would likely all but end imports if they are maintained, but caution that the 75.8% tariff is likely a negotiating tactic and temporary.

November canola futures plunged on news of the Chinese antidumping duty, falling about $30 U.S. to a price of $650.30 U.S. per metric ton.

Canadian farmers are about to begin harvesting canola and are concerned about the price plunge.

At the same time, stocks of Canadian agriculture companies are also being pressured by the Chinese tariff, with shares of %Nutrien (NYSE: $NTR ) and %AgGrowth (TSX: $AFN ) dropping on the news.