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The prospect of tariffs on Canadian goods, including agricultural products, has been a point of contention between Canada and the United States for years. During former President Donald Trump’s administration, threats of tariffs on Canadian exports were frequent. Now, as we look to the future, the proposed tariffs are once again back on the radar, leaving Canadian farmers to consider what the financial fallout could mean for their livelihoods. Experts predict that if these tariffs are implemented, the effects on the Canadian agricultural sector could be significant, leading to increased costs, disrupted trade, and a weakened economy.
Potential USMCA Agricultural Tariffs in 2026
The proposed tariffs would include a 25% levy on many U.S. imports from Canada and Mexico, including critical commodities such as beef, pork, grains and other staple crops. If implemented in 2026 (the scheduled date for the United States, Mexico and Canada to renegotiate USMCA) these tariffs are projected to create a ripple effect through the entire supply chain, from farm to retail, raising prices and reducing the ability of Canadian farmers to compete in both domestic and international markets.
The implementation of 25% tariffs on the U.S.’ two closest trading partners goes against former NAFTA and current USMCA ideology, however, the President-elect claims they will be put in place for purely political reasons.
According to the Bank of Canada, the economic ramifications of President Trump's proposed tariffs would be severe for both countries. If implemented, these tariffs would hit Canadian agriculture hard, reducing exports to Canada’s largest trading partner. On the other hand, these tariffs could also hurt American consumers by raising prices on food products that rely on Canadian imports, potentially leading to inflationary pressures in the U.S. economy (Farm Equipment).
For Canadian farmers, the added burden of tariffs could make their products less competitive in the global marketplace. This is particularly concerning for the beef and pork industries, which rely heavily on exports to the U.S. market. These tariffs would place Canadian farmers at a significant disadvantage, as U.S. farmers and producers may be able to sell their goods at a lower price due to less stringent trade barriers. This, in turn, could decrease the market share for Canadian agricultural goods, further weakening the industry.
Which Canadian Exports are in Jeopardy from Proposed Tariffs?
Grains and Oilseeds
Grains, especially wheat and canola, form a substantial portion of Canada's agricultural exports to the U.S. In 2023, wheat accounted for approximately $2.8 billion, while canola exports reached around $1.3 billion. Soybeans are another significant crop exported, particularly from regions like Ontario and Manitoba. These grains are used in various forms, from animal feed to food production and biofuels.
Livestock and Meat Products
Canada is also a key exporter of livestock and meat products. The U.S. is the primary destination for Canadian beef, pork, and poultry, with exports totalling more than $6 billion annually. Beef and beef products alone generated $2.3 billion in trade in 2023. Canadian pork is also a significant export, valued at about $2 billion, mainly used in processed meats and sausages. Poultry, including chicken and turkey, also plays a major role, with much of it being processed for the American market.
Dairy Products
While dairy is largely domestically consumed due to Canada's supply management system, dairy products still represent a sizeable export category, particularly specialty items like cheese, butter, and yogurt. Canada's dairy exports to the U.S. were valued at $1.1 billion in 2023 (Agriculture and Agri-Food Canada).
Processed Foods and Beverages
Canada's agricultural sector also sends a variety of processed foods and beverages to the U.S. These products include processed meats, canned vegetables, and prepared meals. One of the largest processed exports is maple syrup, a product where Canada, especially Quebec, dominates the market. Canada's beverage exports, including juices and alcoholic beverages like wine and beer, also contribute significantly to this category (Agriculture and Agri-Food Canada).
Horticultural Products
Horticultural products are another key category, with fruits and vegetables such as potatoes, berries, and apples leading the way. Canada exports more than $2 billion worth of fruits and vegetables annually to the U.S., with fresh fruit exports alone reaching $1.7 billion in 2023 (USDA Foreign Agricultural Service).
Canada is particularly well-known for its potato exports, particularly from the provinces of Prince Edward Island and Manitoba. Additionally, greenhouse vegetables and floriculture products (such as flowers and ornamental plants) form a significant part of Canada's agricultural exports to the U.S.
Forestry and Other Agricultural Products
Canada also exports a range of forestry products, including wood, paper, and wood products, to the U.S. These exports, though not traditionally considered part of agriculture, are closely tied to the sector and contribute billions annually to bilateral trade. Similarly, grains for biofuel production are increasingly important in the context of renewable energy (Agriculture and Agri-Food Can).
Canadian & Alberta Farmers in 2025
As the trade negotiations unfold, it’s crucial for Canadian farmers to stay informed, adapt to changing circumstances, and explore new avenues for market expansion. The future of Canada’s agricultural sector may depend on how well the industry can navigate these potential trade barriers and find innovative solutions to maintain growth and sustainability.
As always, Future Ag is here for Alberta’s farmers no matter what the outlook! Stop by your local Future Ag dealer in Red Deer, Olds, Coronation, Stony Plain or Stettler to talk shop anytime and come up with a solid ag plan for 2025.
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