China’s Ministry of Commerce Issues 73.5% Antidumping Tariff on Canadian Pea Starch: What It Means for Trade

• Affected Product: Non-modified Pea Starch (HS Code 11081900)
• Origin Country: Canada
• Security Deposit Rate: 73.5%
• Effective Date: July 1, 2026
• Primary Authority: Ministry of Commerce (MOFCOM)

On June 30, 2026, China’s Ministry of Commerce (Shangwubu 商务部) made a significant move in trade protectionism.

They issued a preliminary antidumping ruling on pea starch imported from Canada, slapping a 73.5% security deposit rate on all Canadian companies exporting the product.

This isn’t just another regulatory announcement—it’s a major shake-up for the agricultural trade between China and Canada, and it signals how seriously Beijing is taking domestic industry protection.

Let’s break down what’s happening, why it matters, and what this means for importers, traders, and businesses involved in the pea starch supply chain.

What Is Pea Starch & Why Does China Care?

First things first: pea starch (Wandou Dianfen 豌豆淀粉) is starch processed from peas (scientific name: Pisum sativum) that hasn’t been modified.

It might sound niche, but this commodity has serious industrial applications:

• Food Industry: Primary use in vermicelli and starch jelly production
• Industrial Uses: Functions as a thickener, stabilizer, emulsifier, and adhesive
• Cross-Sector Applications: Used in food, medicine, papermaking, textiles, coatings, and animal feed

The tariff classification for pea starch is code 11081900 under China’s “Import and Export Tariff of the People’s Republic of China.”

This is a key detail—only products under this specific code are affected by the antidumping investigation.

The Antidumping Investigation: What China Found

The Ministry of Commerce (Shangwubu 商务部) conducted a thorough antidumping investigation on Canadian pea starch imports.

Here’s what they determined:

• Dumping Confirmed: The Investigating Authority preliminarily found that dumping of pea starch from Canada exists
• Material Injury Documented: China’s domestic pea starch industry has suffered material injury
• Causal Relationship Established: There is a direct causal link between the dumping and the injury to domestic producers

This three-part finding is the legal foundation for China’s antidumping action.

Under China’s “Antidumping Regulations of the People’s Republic of China” and Articles 24, 28, and 29 of those regulations, the Ministry had the authority to impose temporary antidumping measures.

The 73.5% Security Deposit Rate: How It Works

Starting July 1, 2026, the real impact kicks in.

Any import operator bringing pea starch from Canada into China must provide a security deposit to China Customs (Zhonghua Renmin Gongheguo Haiguan 中华人民共和国海关) based on a deposit rate applied to all Canadian companies.

The deposit rate: 73.5% of the duty-paid value.

This is substantial.

To give you concrete numbers: for an imported shipment valued at ¥1,000,000 RMB ($137,500 USD), the security deposit would be calculated as:

Deposit Amount = (Customs Duty-Paid Value × 73.5%) × (1 + Import Value-Added Tax Rate)

This formula means importers need to lock up significant capital just to bring the product into the country.

It’s a financial barrier that makes the import less competitive relative to domestically sourced pea starch.

How the Security Deposit System Works in Practice

Here’s the mechanics of how this plays out:

• Calculation Basis: The deposit is calculated on the ad valorem duty-paid value as determined by China Customs
• Timing: The 73.5% rate applies starting July 1, 2026
• Scope: All Canadian companies exporting pea starch face the same rate—there’s no differentiation between producers
• VAT Inclusion: The Import Value-Added Tax Rate is factored into the final deposit amount

For importers, this isn’t a one-time fee—it’s an ongoing cost structure that affects the economics of every shipment.

What “Dumping” Means in This Context

China’s antidumping regulations define dumping as exporting goods at prices lower than their normal value, causing injury to domestic industries.

The Ministry of Commerce’s investigation examined:

• Whether dumping actually existed
• The margin of dumping (how much below fair value the goods were priced)
• Whether the domestic Chinese pea starch industry suffered material injury
• The degree of that injury
• The causal relationship between dumping and injury

All five factors came back affirmative, justifying the antidumping measure.

Protecting Domestic Industry: The Policy Goal

This action reflects a classic trade protectionism strategy.

By imposing a 73.5% security deposit on Canadian imports, China is making domestically produced pea starch significantly more price-competitive.

The effect:

• Canadian exporters face higher costs to enter the Chinese market
• Chinese domestic producers gain a competitive advantage
• Importers have incentive to source locally rather than from Canada
• The domestic industry gets breathing room to recover from alleged dumping

It’s a protective measure wrapped in the legal framework of WTO-compliant antidumping regulations.

Timeline & Implementation: When This Takes Effect

The antidumping measure follows this timeline:

• June 30, 2026: Ministry of Commerce issues preliminary ruling and Announcement No. 41 of 2025
• 10-Day Comment Period: Interested parties can submit written comments to the Investigating Authority
• July 1, 2026: Security deposit requirements become effective for all imports

The 10-day window for comments gives affected parties (Canadian producers, Chinese importers, trade associations) a chance to provide input before the measure is finalized.

Who This Affects: Stakeholders in the Supply Chain

This preliminary ruling impacts multiple players:

• Canadian Pea Starch Producers: Face a significant barrier to market access in China
• Chinese Import Operators: Must provide substantial security deposits, affecting cash flow
• Chinese Domestic Producers: Gain competitive advantage and potential market share recovery
• End Users (Food, Pharma, Textile Companies): May face higher pea starch costs if supply shifts to higher-cost domestic sources
• China Customs: Manages the collection and administration of deposits

Everyone up and down the supply chain feels this change.

The Broader Context: China’s Trade Protection Strategy

This isn’t an isolated move.

China regularly uses antidumping investigations and tariffs to protect domestic industries—it’s a core component of industrial policy.

The Ministry of Commerce conducts dozens of these investigations annually across sectors ranging from chemicals to semiconductors.

The pea starch case follows the same playbook:

• Investigate allegations of dumping
• Find evidence of material injury to domestic industry
• Issue preliminary ruling with security deposits
• Allow comment period
• Issue final determination (typically within months)

The security deposit phase is temporary—it buys time while the investigation continues toward a final determination that could result in permanent tariffs.

Key Takeaway: What You Need to Know About This Antidumping Ruling

Here’s the bottom line on China’s antidumping ruling on Canadian pea starch:

• 73.5% security deposit rate applies to all Canadian pea starch imports starting July 1, 2026
• China’s Ministry of Commerce found evidence of dumping, material injury, and causal relationship
• This is a temporary measure while the investigation continues toward a final ruling
• The security deposit effectively increases the cost of Canadian imports, protecting domestic producers
• Affected parties had 10 days from June 30, 2026 to submit comments
• Importers must calculate deposits using the formula: (Duty-Paid Value × 73.5%) × (1 + VAT Rate)

For traders, importers, and businesses relying on Canadian pea starch, this is a critical shift in market dynamics that affects procurement strategy, pricing, and supply chain decisions—all in the context of ongoing China-Canada trade relations.

References

• Announcement on the Preliminary Antidumping Ruling on Pea Starch Originating in Canada – Ministry of Commerce (Shangwubu 商务部)
• Import and Export Tariff Regulations of the People’s Republic of China – General Administration of Customs (Haiguan Zongshu 海关总署)
• Canada-China Trade Relations and Market Access – Global Affairs Canada (Jianada Quanqiu Shiwubu 加拿大全球事务部)