Donald Trump’s trade war is causing chaos for farmers and food producers on both sides of the US-Canada border, as businesses grapple with how to disentangle supply chains that have been interconnected for decades.
The US president slapped 25% tariffs on most Canadian and Mexican goods on Tuesday, prompting Canada to respond with its own 25% levies on C$30 billion ($20.9 billion) worth of products, including on orange juice, coffee and fruit.
Prime Minister Justin Trudeau has also threatened to expand that to cover an additional C$125 billion in goods next month, including US beef, pork and more fresh produce.
While Trump delayed the new duties on many products on Thursday, there’s still the specter they will return in April — along with, perhaps, sweeping “reciprocal tariffs” and other levies on agriculture that he has previously talked about. North America’s food industry now faces the overwhelming task of adapting to a turbulent situation of ever-changing rules.
“This is the biggest challenge we’ve ever faced and I’ve been doing this for over 20 years,” said John Nickel, a Manitoba hog producer who sells exclusively to the US. His first of two weekly shipments of piglets crossed the border tariff-free on Monday, but he doesn’t know whether a 25% markup will appear on the invoice for the animals he sent Thursday morning.
With harsh winters and short growing seasons, Canada must rely on the US for many of its fresh fruits and vegetables. At the same time, its farmers and fishers raise and catch more animals than 41 million Canadians need, so they sell to American consumers, who also represent a market that’s more than eight times larger.
The agricultural supply chain underscores Canada’s dependency on the US for exports, as well as its role in feeding Americans. But while Canada send 76% of its exports to the US, Americans rely on their northern neighbor for less than a fifth of theirs.
That means Canadian businesses and farmers will face greater challenges in finding a replacement for US demand. Meanwhile, consumers protesting Trump through a “Buy Canadian” campaign will have a hard time trying to find substitutes for all of the foodstuffs they want.
The pork supply chain involving Nickel is one example of a deeply integrated network that crosses the Canada-US border.
