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CBC
10-03-2025
- Business
- CBC
Retaliatory tariffs imposed by China on Canadian canola causes uncertainty for Manitoba farmers
A Manitoba farmer says the 100 per cent retaliatory tariffs China is putting on canola oil and oil cakes are causing additional uncertainty in an agriculture industry dealing with the potential impact of U.S. tariffs on canola products. China's Commerce Ministry announced Saturday the tariffs will go into effect on March 20 in retaliation for Canada's 100 per cent tariffs on Chinese-made electric vehicles and a 25 per cent levy on Chinese aluminum and steel products imposed on Oct. 1. Bruce Dalgarno, who farms canola and other crops near Newdale, Man., about 225 kilometres northwest of Winnipeg, said Canada exports approximately 2.5 million tonnes of oil cakes to China each year, which is used to feed livestock or be ground into oil meal. A reduction in the shipments will apply pressure on grain elevator companies to lower the price of canola and export it to other countries, which will impact profitability for farmers, Dalgarno said. "I think there's lots of farmers [who] are going to be looking at their … input costs, because input costs on canola are the highest of any crop we've got, so as the price comes down, it becomes uncompetitive," he said. Canada only ships about 600 tonnes of canola oil to China per year, so that tariff likely won't have a huge impact on the Canadian economy, Dalgarno said. Currently there are no tariffs on canola seed from Canada, which exports between five million and six million tonnes to China per year, he said. China is Canada's second-largest trading partner, following the U.S., which has imposed 25 per cent tariffs on Canada, Mexico and China, although U.S. President Trump paused some tariffs imposed on Canadian goods, including canola products, until April 2. Canola oil exports to the U.S. alone made up at least $1.3 billion of Manitoba's economy in 2023, and was one of the top five exports that year, according to a Manitoba Bureau of Statistics summary. "The tariffs in the States, I think, are going to have a larger impact than any tariffs coming from China now, and that's hoping that they don't change it to something else. Like if they also included the seed going into China, well, that would be even more damaging," Dalgarno said. Warren Ellis, president of the Manitoba Canola Growers Association, which has about 7,500 members in the province, said any extra costs will directly affect the money in farmers' pockets and how much they can sell their canola seed for. "Their only option is to try to cut costs ... so we just hope like heck that the inputs that we're going to be using come down in price slightly, so that it will allow us to have some sort of margin," Ellis said. Seed, canola oil and oil cakes account for $5 billion worth of Canadian exports to China, while exports to the U.S. total $8 billion, he said. Ellis said farmers are used to dealing with adversity in the industry, "but there are limits and there will be some collateral damage." The association will lobby the provincial and federal governments to address the effects on Manitoba's agriculture sector of the tariffs on Chinese-made electric vehicles, he said. Prime Minister Justin Trudeau said in August that Ottawa was imposing the levies to counter what he called China's intentional state-directed policy of over-capacity. Canada followed the lead of the United States and the European Union, both of which have also applied import levies to Chinese-made electric vehicles. On Friday, the federal government announced some tariff relief measures for Canadian businesses and workers, including $1 billion in new financing through Farm Credit Canada to reduce financial barriers for the Canadian agriculture and food industry. "The federal government should certainly be there to backstop the Canadian agriculture sector and the canola growers, because we're the ones taking the hit," Dalgarno said. "It's all causing a lot of uncertainty in the industry." Chris Davison, president and CEO of the Canola Council of Canada, said retaliatory tariffs from China are expected to have a "widespread and negative impact" across the industry. The total economic impact on the Canadian economy from the canola sector is more than $43 billion annually, he said. Davison expects the tariffs will restrict or close the canola market between Canada and China. "We advocate and are strong supporters of having, you know, predictable tariff-free trade. We think that's the best path forward, not just for Canadian canola, but for Canadian agriculture and agri-food," he said. "We are going to need the Canadian government to engage very systematically and substantively with our trade partner China in this instance, in order to resolve this issue." China will also apply a 25 per cent duty on Canadian aquatic products and pork, the Chinese ministry said in a statement.
Yahoo
05-02-2025
- Business
- Yahoo
Manitoba has few options to 'Trump-proof' its economy in next 30 days, experts say
Manitoba's premier says he wants to reduce the province's reliance on trade with the United States after potential tariffs on Canadian goods were put on hold, but experts say it's not as simple as it sounds. Although U.S. President Donald Trump's long-promised 25 per cent tariffs on Canadian goods were paused for 30 days on Monday, Premier Wab Kinew said Manitoba still needs to diversify its exports and boost its production capabilities in order to decrease reliance on the U.S. market. "It's very clear that we have to start planning our economy to be more resilient, and to be able to withstand these sort of situations, so that we don't find ourselves in a similar position going forward," he said. While the reprieve may give businesses some room to build up inventories and explore potential alternative suppliers or markets, it's not nearly enough time to make substantial structural changes in terms of production, a University of Manitoba economics professor says. "In general, I would say 30 days is not a whole lot of time, and for big, big export volumes and big projects, it's nowhere near going to be close enough," said Fletcher Baragar. But Manitoba does have options when it comes to playing the long game, with a $36.4-million investment in the Port of Churchill announced by the provincial government Tuesday just one way to help explore other global markets for Manitoba's large bulk commodity exports, he said. Manitoba's top exports to the U.S. in 2023 were medicine, canola, hydroelectric power, frozen potatoes and other vegetables, as well as crude oil, according to the Manitoba Bureau of Statistics. That year, Manitoba exported about $15.5 billion worth of goods across the southern border, but it imported just over $23 billion, data from Statistics Canada shows. Fletcher Baragar, an economics professor at the University of Manitoba, says Canada should join forces with other nations facing Trump tariff threats — like Mexico, China and potentially the European Union — in order to strengthen economic ties over the next four years. (Karen Pauls/CBC) Baragar has concerns about that trade difference if the U.S. tariffs do come to fruition, because Manitoba's agricultural industry is a big part of the province's economy and relies heavily on fertilizer, equipment and machinery imported from down south, he said. "Certainly, Canada has some capacity to provide those crucial products, but to build up the capacity to supply the Canadian market entirely is, again, one of those things that's not going to happen in 30 days," Baragar said. "That's going to take perhaps a year or two or three, perhaps longer, to adjust production." Governments may need to provide some form of short-term financial assistance to farmers if Trump's tariffs hit the agricultural sector, he said. The tariffs would create "a seismic shock" for Canada's economy, but Baragar says they're now in a 30-day cloud of uncertainty, and no one can say for certain how long the threat of a U.S. trade war will last. Even if Trump did impose tariffs for the entirety of his four-year term as president, there's a reasonable possibility that his successor would eliminate them, Baragar said. However, the uncertainty could dissuade businesses from investing in and boosting manufacturing capacity in Manitoba. On a broader scale, he says Canada should join forces with other nations facing Trump tariff threats — like Mexico, China and potentially the European Union — in order to strengthen their own economic ties over the next four years. "There's possibilities here that haven't been fully explored yet." Hard truths, silver linings Among the reasons given for the tariffs, Trump has said they were to punish Canada for being lax on drugs and migrants, even though the U.S. government's figures show less than one per cent of fentanyl and illegal migrants are coming from this country. He's also cited inaccurate trade deficit figures. If the tariffs are imposed, the added costs could make some Canadian goods less competitive compared to those made in the U.S. or coming from other countries. Buying local and working on eliminating interprovincial trade barriers are a couple of the more obvious ways Canada could boost its economy in the next 30 days, said Barry Prentice, director of the University of Manitoba's Transport Institute at the Asper School of Business. "That we can do, and they don't take a long time," he said. "Beyond that, you know, it's pretty hard to turn the ship around." However, Prentice says he doesn't believe Trump will ever follow through on his tariff threats, as global markets saw sharp losses Monday before the 30-day pauses were announced. "The cost to [Trump] politically, and the U.S. in general, is just too great," he said. Prentice also notes that making changes to the current supply chains between Canada and the U.S. wouldn't be as simple as some might think. "When you have established contacts and products and what have you, you don't just instantly shift and buy from somebody else," he said. "The question always is, who is that somebody else? Because the reason you're buying from Canada, from Manitoba in the first place, is that we have good prices and good quality, and we're handy, we're reliable — and you don't just immediately switch out of that." Barry Prentice, director of the University of Manitoba's Transport Institute at the Asper School of Business, says while it's 'pretty hard to turn the ship around' on trade and manufacturing, he doesn't believe Trump will ever follow through on his tariff threats. (Submitted by Barry Prentice) Trump's tariff threats fail to recognize that a lot of Canada's trade with the U.S. is made up of semi-finished goods, said Prentice. "In other words, we sell things that go into making things in the U.S., and sometimes across the border more than once, so if you put tariffs on those sorts of things, then you make your own industry less competitive." However, the situation has presented a sort of silver lining, he said, forcing Canada to reckon with its fentanyl problem and illegal border crossings. "If nothing else, this has caused Canadians to take a hard look in the mirror, and maybe reconsider some things that we take for granted."
CBC
05-02-2025
- Business
- CBC
Manitoba has few options to 'Trump-proof' its economy in next 30 days, experts say
Manitoba's premier says he wants to reduce the province's reliance on trade with the United States after potential tariffs on Canadian goods were put on hold, but experts say it's not as simple as it sounds. Although U.S. President Donald Trump's long-promised 25 per cent tariffs on Canadian goods were paused for 30 days on Monday, Premier Wab Kinew said Manitoba still needs to diversify its exports and boost its production capabilities in order to decrease reliance on the U.S. market. "It's very clear that we have to start planning our economy to be more resilient, and to be able to withstand these sort of situations, so that we don't find ourselves in a similar position going forward," he said. While the reprieve may give businesses some room to build up inventories and explore potential alternative suppliers or markets, it's not nearly enough time to make substantial structural changes in terms of production, a University of Manitoba economics professor says. "In general, I would say 30 days is not a whole lot of time, and for big, big export volumes and big projects, it's nowhere near going to be close enough," said Fletcher Baragar. But Manitoba does have options when it comes to playing the long game, with a $36.4-million investment in the Port of Churchill announced by the provincial government Tuesday just one way to help explore other global markets for Manitoba's large bulk commodity exports, he said. Manitoba's top exports to the U.S. in 2023 were medicine, canola, hydroelectric power, frozen potatoes and other vegetables, as well as crude oil, according to the Manitoba Bureau of Statistics. That year, Manitoba exported about $15.5 billion worth of goods across the southern border, but it imported just over $23 billion, data from Statistics Canada shows. Baragar has concerns about that trade difference if the U.S. tariffs do come to fruition, because Manitoba's agricultural industry is a big part of the province's economy and relies heavily on fertilizer, equipment and machinery imported from down south, he said. "Certainly, Canada has some capacity to provide those crucial products, but to build up the capacity to supply the Canadian market entirely is, again, one of those things that's not going to happen in 30 days," Baragar said. "That's going to take perhaps a year or two or three, perhaps longer, to adjust production." Governments may need to provide some form of short-term financial assistance to farmers if Trump's tariffs hit the agricultural sector, he said. The tariffs would create "a seismic shock" for Canada's economy, but Baragar says they're now in a 30-day cloud of uncertainty, and no one can say for certain how long the threat of a U.S. trade war will last. Even if Trump did impose tariffs for the entirety of his four-year term as president, there's a reasonable possibility that his successor would eliminate them, Baragar said. However, the uncertainty could dissuade businesses from investing in and boosting manufacturing capacity in Manitoba. On a broader scale, he says Canada should join forces with other nations facing Trump tariff threats — like Mexico, China and potentially the European Union — in order to strengthen their own economic ties over the next four years. "There's possibilities here that haven't been fully explored yet." Hard truths, silver linings Among the reasons given for the tariffs, Trump has said they were to punish Canada for being lax on drugs and migrants, even though the U.S. government's figures show less than one per cent of fentanyl and illegal migrants are coming from this country. He's also cited inaccurate trade deficit figures. If the tariffs are imposed, the added costs could make some Canadian goods less competitive compared to those made in the U.S. or coming from other countries. Buying local and working on eliminating interprovincial trade barriers are a couple of the more obvious ways Canada could boost its economy in the next 30 days, said Barry Prentice, director of the University of Manitoba's Transport Institute at the Asper School of Business. "That we can do, and they don't take a long time," he said. "Beyond that, you know, it's pretty hard to turn the ship around." However, Prentice says he doesn't believe Trump will ever follow through on his tariff threats, as global markets saw sharp losses Monday before the 30-day pauses were announced. "The cost to [Trump] politically, and the U.S. in general, is just too great," he said. Prentice also notes that making changes to the current supply chains between Canada and the U.S. wouldn't be as simple as some might think. "When you have established contacts and products and what have you, you don't just instantly shift and buy from somebody else," he said. "The question always is, who is that somebody else? Because the reason you're buying from Canada, from Manitoba in the first place, is that we have good prices and good quality, and we're handy, we're reliable — and you don't just immediately switch out of that." Trump's tariff threats fail to recognize that a lot of Canada's trade with the U.S. is made up of semi-finished goods, said Prentice. "In other words, we sell things that go into making things in the U.S., and sometimes across the border more than once, so if you put tariffs on those sorts of things, then you make your own industry less competitive." However, the situation has presented a sort of silver lining, he said, forcing Canada to reckon with its fentanyl problem and illegal border crossings. "If nothing else, this has caused Canadians to take a hard look in the mirror, and maybe reconsider some things that we take for granted."
