Tariff shock

ABBOTSFORD – BC agriculture leaders are taking a strategic approach in response to the disruptive potential of a 25% tariff on Canada’s exports to the US.

“It’s really bringing people together,” says BC agriculture minister Lana Popham. “The amount of support for Canadian products is at an all-time high.”

That’s true not just domestically, but internationally as countries look for alternatives to US products in the face of punishing duties imposed by an inward-looking US administration.

Originally announced February 1 following US president Donald Trump’s declaration of a national emergency over illegal immigration and fentanyl smuggling, the 25% tariff was met the same day by counter-tariffs from Canada.

A wide variety of products were affected, including fresh and processed dairy, vegetable, fruit and meats, as well as a host of farm inputs, including equipment.

Both sets of tariffs were paused February 3 for a period of 30 days, but could return March 5.

BC exported $4.3 billion in agriculture and food products in 2023, 82% of which went to the US. BC’s top three export categories are mushrooms, potted and bedding plants and blueberries.

But it’s complicated: farm inputs and fresh and processed food products, may travel back and forth across the Canada-US border several times from production through further processing.

Blueberries are a prime example, with BC exporting about 135 million pounds to the US in 2024. However, the province also imported about 118 million pounds from the US that same year.

“We trade with the US pretty much pound for pound,” says BC Blueberry Council executive director Paul Pryce.

One reason for this two-way movement, he says, is the seasonality of the product.

“Our harvest is later in the year,” he explains.

By working together, growers on both sides of the border are able to achieve a longer marketing window for buyers in both countries than they could working within the confines of their own borders.

On February 4, Pryce was in Salem, Oregon, to address US growers at the Oregon Blueberry Conference. He took the opportunity to explain the damage the proposed tariffs could do to the current balance under CUSMA, the free trade agreement that replaced NAFTA in 2020 during US President Donald Trump’s previous term.

“When it comes to blueberries, we’re all getting a pretty good deal here, so why would we mess with a good thing?” he told growers.

Growers – many of them from Republican counties – responded positively, pledging to contact their elected officials.

Pryce says this is an essential step right now.  In addition, the BC Blueberry Council will join the North American Blueberry Council in Washington, DC, in March as well as approach the Canadian government for more producer support. The council is also exploring alternative markets and preparing producers and processors to take advantage of new export opportunities.

Beef exports

BC Cattlemen’s Association general manager Kevin Boon sees similar priorities for his sector.

Preliminary data for 2024 indicates that 44.5% of Canadian beef and cattle goes to the US. Trade is strong both ways in live animals and processed product.

But one estimate suggests that a 25% US tariff on Canadian beef and cattle would result in a 15% price decline for Canadian boxed beef and cattle.

Boon is disappointed in Canadian leadership and its knee-jerk reaction to impose counter-tariffs.

“I’m not worried about tariffs coming onto our product. We can ride out the storm for a while and find other markets,” he says. “A bigger hit to us will probably be from counter-tariffs on the products we have to bring in, like machinery.”

There’s a precedent for the potential loss of markets he describes.

“In 2003 when BSE hit, we lost all our markets,” he says. “The US opened to us first, so we stuck with that. Now we have become complacent and over-reliant on them: it’s easiest to ship north-south.”

Boon knows Canada Beef is constantly working to find new markets, particularly in Asia, and processors and retailers can get going to help develop them.

“World prices of beef are up; if Asia sees Canada is a good place to buy, this may be the opportunity to open the door,” he says.

Trading partners value consistency above all, and with the US “tearing up agreements on its friends,” Canada is looking like a good alternative.

“It’s given people a reason to stop and think,” Boon says. “People need to understand that there are three days of food in the grocery stores, and any disruption means they need to change their food buying decisions.”

Domestically, this means everyone needs to buy Canadian and find new sources and markets.

This is a focus of BC’s response, says Popham.

“We want to make sure that we are increasing our primary production and

value-added, because if there is a massive shift in buying, we have to be able to meet that demand,” she says. “Support for Canadian products is at an all-time high.”

Boon hopes Canada’s leaders get back to the negotiating table to update CUSMA. This needs to be a two-way conversation based on substantive concerns on all sides: signals, not noise.

Pryce, looking at blueberries, thinks the current noise and resulting uncertainty will continue, whether or not tariffs come into effect March 5. The uncertainty itself “casts a long shadow,” and some blueberry producers may be wondering whether or not to go ahead with current pollination and pruning tasks and costs because of uncertainty about returns on the 2025 crop.

Pryce and Boon both see Trump as a disruptor, kicking up dust and noise, and are listening for signals and looking for strategies.

“Let’s look through this to solutions,” Boon says.