Canadian farmers find themselves in a precarious position as trade tensions between China and the United States escalate. This week, China imposed a 25% tariff on Canadian pork and aquatic products, excluding canola seed. Meanwhile, Canada countered by slapping duties on Chinese-made electric vehicles, steel, and aluminum products last fall. These developments have placed Canadian agriculture in a challenging financial scenario.
The tariffs significantly impact Canadian grain exports, nearly half of which are directed to China and the United States. The U.S. recently imposed its own set of 25% tariffs on Canadian goods, although some relief is provided until April 2 for products that adhere to rules-of-origin requirements under the Canada-U.S.-Mexico Agreement. However, with Saskatchewan being the largest farm area in Canada, dominating the production of canola, wheat, and pulse crops, the new tariffs threaten to disrupt livelihoods.
“It’s kind of like sitting between two elephants right now,” said Andre Harpe.
The agricultural sector's challenges are further compounded by the recent federal approval of Viterra Ltd.'s acquisition by American agriculture giant Bunge Ltd. This acquisition has raised concerns about reduced competition potentially depressing crop prices. Last year, Canada's canola exports to China reached almost $5 billion, with $938.6 million attributed to oil and meal. Yet, due to the tariffs, farmers report an almost 10% devaluation in canola overnight.
“Almost 10 per cent of the value of canola has just evaporated overnight,” noted Bill Prybylski, reflecting on the sudden financial strain.
For farmers like Bill Prybylski, who need immediate cash flow to fund spring planting, the situation is dire. The tariffs add to their burdens at a crucial time when input costs are rising. Prybylski emphasized the urgency for governmental intervention.
“We’re calling on the (federal) government to take immediate action — first, to engage with China to find a resolution and, second, to establish a compensation plan to cover the financial losses farmers are facing,” Prybylski urged.
Dean Roberts, another farmer affected by these developments, shared his uncertainty regarding future steps.
“I’m still sitting here staring at a spreadsheet kind of questioning where I go from here,” Roberts stated.
