Posted on November, 28, 2024 at 08:15 pm
Industry leaders are reacting to President-elect Donald Trump’s proposed 25 per cent tariff on Canadian exports, which could disrupt crucial Prairie sectors including agriculture and uranium.
Last night, via social media, Trump stated both Canada and Mexico would incur the tariff sanction should neither country take initiative on drug trafficking and migrants at their borders.
The threat prompted premiers and the prime minister to schedule an emergency meeting to discuss trade relations.
Cereals Canada Director of Market Intelligence and Trade Policy Leif Carlson called the news ‘alarming’ and said with the level of trade integration between the two countries, a tariff of that size would lead to many changes in the grain sector.
Canada’s exports include non-durum wheat, durum wheat, barley and oats with an average annual value of $1.3 billion. Saskatchewan is the country’s largest producer of cereal grains and the main producer of durum wheat, representing half of the economic impact generated by the sector in Canada.
While the annual value sounds big, Carlson stressed profit is already slim enough without tariffs.
“The grain sector is a tight margin industry. Sometimes the number of dollars that we talk about are very big in agriculture but you’re talking about farmers and traders and processors that work on tight margins,” he said.
Carlson noted the industry is diversified enough to not solely rely on the U.S. market, but a tariff would stymie profits for Canadian farmers and processors. American processors using Canadian grain would also face higher costs — one surely to be passed onto consumers.
“It would be a pretty extreme tariff,” Carlson said.
Success of the grain market and Canada’s economic expansion overall would not have been possible without existing trade agreements, like NAFTA and its successor USMCA, he added. The deal is to be renegotiated in 2026.
The grain industry’s total economic impact on the Canadian economy is $68 billion with 370,000 paid full-time jobs.
Impacts to uranium market
Cameco issued a statement in response to the president-elect’s post. It emphasized a strong, positive relationship between the two countries when it comes to the civilian nuclear sector.
“The United States needs a secure western supply of uranium fuel to address its increasing electricity demands, meet net zero goals and power its AI future, which Cameco can provide. The hope is that unencumbered trade in nuclear goods and services between Canada and the United States continues, allowing our countries to support each other in achieving prosperity,” the e-mailed response said.
The company is one of the world’s largest uranium producers, and controls ownership of the world’s largest high-grade uranium reserves.
Source: SASK