Grainswest - Fall 2025

Fall 2025 grainswest.com 21 he non-stop tariff talk has been dizzying to say the least. For those keeping score at home, U.S. President Donald Trump has publicly announced levies on Canada, but also on practically every major economy on earth. Numbers range from just a few percentage points to as much as 50 per cent. Recently, he secured a major deal with the EU for 15 per cent. Canada let its Aug. 1 deadline for a deal slip away. Now, the country is stuck paying a 35 per cent blanket tariff on all products not exempted under the CUSMA agreement, which is a short list of about five per cent of all Canadian products. Just as the month ended, the Americans also struck down duty-free de-minimis exemptions, which allowed the free shipment of goods under US$800, much to the detriment of many small Canadian businesses. Unrelated, but massively painful, a 75 per cent tariff on canola has been slapped on Canada by China over its concern dumping has diluted its domestic market. On average, the U.S. tariff rate has increased to 18.3 per cent, a level not seen since the Great Depression. Brazil and India have seemingly taken the biggest hit at 50 per cent, though these two countries combined account for less than five per cent of goods imported by the U.S. Between April, when they went into effect on most countries that export goods to the U.S., and August, the Americans have secured more than $100 billion in tariff revenue. All this massive uncertainty continues to cause headaches and constant guesswork for Canadian politicians and bureaucrats behind the scenes. One of the biggest fears talked about largely in whispers is uncertainty about the CUSMA agreement to be renegotiated in 2026. Yes, Canada must pay tariffs now on a small amount of goods, but the number of products exempted under CUSMA is staggering. What happens if they aren’t exempt? Everyone has taken note of the fact that our once stable trade agreement with the U.S. has been upended, and that Canada needs a fresh trade strategy. To that end, RBC published a study this year, Food First: How agriculture can lead a new era for Canadian exports . The report’s key finding is that, with the right strategy, Canada could grow by 30 per cent of global market share and drive $44 billion in new agrifood investments come 2035. The bank’s agricultural policy lead Lisa Ashton explained that Canada’s ag exports have quadrupled in value since 2000, yet the country’s market share has shrunk by 12 per cent in that same period. “With rising trade uncertainty and escalating tariffs in North America, Canada must accelerate efforts to diversify its trading partners, particularly in Southeast Asia, Africa and the Middle East,” she said. Another aspect of the issue is Canada and the U.S. have fragile relations as competitors expand their reach. Upstart Brazil has gained ground in the Middle East and Africa while Canada’s traditional competitor Australia continues to make big inroads into Southeast Asia. With about 60 per cent of Canada’s agrifood products going into the U.S., the report states our country is now “overly reliant” on our southern neighbour to buy what we produce. It also notes more than $100 billion worth of agriculture and agri-food products cross the border annually, with the U.S. importing nearly 60 per cent of this trade. One example is canola, which, in 2024, might as well have had the American flag on labels as 96 per cent of all oil and 65 per cent of meal exports were destined for that country. The world’s largest unsecured border helps bring the two countries’ trading relationship closer than ever, but for many, it’s too much bread in one basket. Compared to our primary exporting competitors—Australia, Brazil, the Netherlands and the U.S.—we send 20 per cent more to America than our next competitor does to its biggest market (Brazil to China, about 35 per cent). “Canada can use the U.S. tariff threats as a wake-up call to leverage agriculture and agri- food as a driving force for trade diversification while building Canadian self-sufficiency.” —Lisa Ashton