Canada’s agriculture trade is getting ready for potential disruption as U.S. President-elect Donald Trump proposes a 25% tariff on imports from Canada and Mexico, citing border safety considerations.
With billions of {dollars} in agricultural commerce in danger, the transfer might severely affect exports of pork, beef, grain, and different key Midwestern Ontario commodities which might be closely reliant on cross-border commerce. The tariff proposal has reignited considerations for Canada’s supply-managed sectors, which have traditionally confronted challenges at any time when commerce agreements just like the USMCA (United States-Mexico-Canada Settlement) are revisited. Aaron Martin, Common Supervisor of the Stratford Chamber of Commerce, emphasised the precarious place these industries might face if quotas are focused.
“Every time NAFTA, or the USMCA as it’s now called, is opened up, that can sometimes hit on quota, which can be detrimental to chicken and dairy operations, so a lot of them are waiting to see what happens along those lines,” he mentioned.
The ripple results of tariffs might additionally prolong past exports. Martin famous that Canada’s weaker greenback has been advantageous for promoting agricultural commodities at aggressive costs on worldwide markets. Nevertheless, counter-tariffs might upset this steadiness.
“If we have counter-tariffs, that can hurt things like equipment coming this way, or some of our inputs. If we’re buying everything on the international market, the fertilizer prices might go up, so that can bring up our cost of production,” Martin defined.
Gear commerce, particularly, might face challenges. The weaker Canadian greenback usually makes used gear enticing to American patrons, however reciprocal tariffs might complicate these transactions, forcing producers to put money into dearer new gear.
“With our equipment, a lot of our used equipment…when we have a weaker dollar, that goes stateside as well,” Martin mentioned. “If we’ve got a decrease greenback or larger tariffs, as a result of we’ve got reciprocating tariffs, that may very well be a difficulty as nicely.”
Midwestern Ontario’s agricultural sector is bracing for uncertainty within the months forward. Stakeholders hope that efforts and the built-in nature of commerce between Canada and the U.S. will assist decrease the affect, however the potential for a tariff-driven commerce warfare stays a priority.
