Cease and desist: Canadian agriculture organizations respond to U.S. trade war

As a nation, to sow chaos with rapid policy changes is a questionable trade strategy. The Trump administration’s trade war with Canada and Mexico has caused anxious uncertainty in the agriculture and agri-food industries of all three CUSMA signatories. By mid-March, indicators of a self-made recession gripped the United States, and with it, the spectre of a global economic downturn.

According to Grain Growers of Canada (GGC), this country exports more than $17 billion worth of grain and grain products to the U.S. This makes Canada the top supplier of these products. Of U.S. crop imports, Canada supplies 99 per cent of oats, 98 per cent of barley, 85 per cent of flax and 72 per cent of canola.

“A 25 per cent tariff on Canadian grain and grain products is in effect a 25 per cent tax on American consumers who purchase groceries every day,” said Kyle Larkin, GGC executive director, in a March 4 press release. “From bread and pasta to beer, oatmeal and canola oil, dozens of products could see price increases amid an affordability crisis for both American and Canadian consumers.”

Support for the trade war has slowly soured among U.S. agriculture organizations. The influential American Farm Bureau Federation has gently urged an end to hostilities.

“Unfortunately, farmers and rural communities often suffer from tariff retaliation. More than 20 per cent of U.S. farm income comes from exports, with Mexico and Canada being agriculture’s largest trading partners, and approximately 85 per cent of potash—a key ingredient in fertilizer—is imported from Canada,” said Zippy Duval, the organization’s president, in a March 6 press release.

The Canadian agriculture industry has been much bolder in its pronouncements. Cereals Canada has broadly raised the alarm about the negative consequences of a 25 per cent U.S. tariff on imported goods.

“We are working with partners on both sides of the border in pursuit of resuming North American free trade,” said Mark Walker, vice president of markets and trade.

He urged Canadian governments to likewise work with the Americans and make forward-looking adjustments to this country’s farm programs.

“Canadian governments need to work constructively with U.S. counterparts across all levels to resolve the current trade dispute. Making sure that business risk management programming for producers will be able to respond to current and future trade disruptions is essential. Additionally, increasing agri-marketing program cost-sharing ratios and increasing overall funding envelopes to help associations further diversify exports to reliable markets is necessary, now more than ever.

Alberta Premier Danielle Smith spoke to the province’s response in a March 12 press release.

“American public opinion, industry and U.S. leaders are opposing a continued trade dispute with Canada more and more with each passing day. We therefore need to avoid escalation, play the long game and focus on getting to a mutually beneficial trade resolution with our American neighbours.”

The Canadian Agri-Food Trade Alliance has bluntly called for a halt to the trade war and emphasized the damage it will cause all three North American economies. “The United States administration’s decision will have negative consequences for American consumers and businesses,” said executive director Michael Harvey.

“The decision has weakened the U.S. along with Canada and Mexico. CAFTA supports the efforts of the Government of Canada to achieve a lifting of the tariffs and return to focus on a rational, rules-based, free trading system that benefits both producers and consumers, regardless of which side of the border they are on.”

Walker echoed Harvey’s assessment that tariffs will have significant negative impact on supply chains.

“Canadian and American family farms, small businesses, exporters and jobs rely on rules-based free trade to source ingredients and market finished food products. The tariff uncertainty is already having a negative impact on our trade, and we expect that the reimposition of tariffs will increase food manufacturing costs in the U.S., resulting in further inflation in the U.S.”

This emerging tariff nightmare presents existential danger for Canadian farmers, he emphasized.

“Canadian family-run grain farms are already facing death by a thousand cuts through increased input costs, regulatory burdens and taxation. Uncertainty with our largest trading partner for grain and grain products, on top of ongoing instability with our second-largest trading partner, China, could push many family farms to the brink.”

Canola is now threatened on two fronts, as China has announced it will tariff canola oil and meal at 100 per cent as of March 20. In a March 4 joint press release, the Canadian Canola Growers Association (CCGA) and the Canola Council of Canada (CCC) noted Canadian canola exports to the U.S. hit $7.7 billion in 2024 and create an average annual benefit of USD$11.2 billion in U.S. economic activity through activities such as processing, refining, livestock feeding and food industry uses.

“The canola industry delivers a true win-win for both Canada and the U.S., and we must do everything we can to restore smooth, predictable, tariff-free canola trade between our two countries,” said Rick White, CCGA president and CEO and Chris Davison, CCC president and CEO. The uncertainty caused by the trade war and the tariff itself will reduce profitability for Canadian canola farmers, they emphasized.

On the corporate side, ag businesses such as Nutrien have openly campaigned against tariff implementation. The fertilizer producer has taken action to minimize financial impact on its operations.

“We have engaged extensively with policymakers and industry stakeholders on both sides of the border to reinforce the importance of the free flow of agricultural inputs across the U.S.–Canada border in supporting farm productivity, food security and supply chain stability,” said Shawn Churchill, head of corporate communications for Nutrien.

“While we will continue to serve our U.S. customers, the cost of tariffs would ultimately be borne by U.S. farmers. In anticipation of tariffs, we’ve moved as much potash as possible south of the border ahead of the spring planting season.”

“The North American live cattle and beef supply chain is uniquely integrated, playing a vital role in food security and supporting local and regional food systems,” said Janice Tranberg, president and CEO of the National Cattle Feeders Association. “Any disruption could have severe consequences.”

In 2024, Canada exported 580,000 live cattle for immediate slaughter, she noted. As cattle are a live commodity, she added, they can’t be somehow stored until market conditions improve, and market diversification opportunities are limited.

“The imposition of tariffs on beef and cattle would significantly impact both the Canadian and American beef industries, affecting prices, production, trade flows and margins.”

As the U.S. trade war lurches forward, the Canadian agriculture sector continues to warn of dire consequences for farmers in both countries. It is a sign of positive progress that their American counterparts have begun to echo their cautionary voices.