Canada’s Response to U.S. Tariffs and Its Impact on Agriculture
In response to U.S. tariffs on Canadian products, the Canadian government is imposing a 25 percent tax on $155 billion worth of imports. These countermeasures aim to protect Canada’s interests, consumers, workers, and businesses and will remain in place until the U.S. removes its tariffs. However, U.S. goods already in transit when the measures take effect will be exempt. The United States exports more goods to Canada than to any other country, while approximately 70% of Canadian exports to the U.S. are used in manufacturing other products. This huge economic interdependence between the two countries makes the tariffs a major threat to cross-border trade and economic stability, While these measures are intended to protect the Canadian economy, they may have unintended consequences. The Canadian agri-food industry is particularly vulnerable, as Canada’s trade response affects several U.S. agricultural products, including live poultry, meat and edible offal, dairy products, grains, fruits, coffee etc.
The Canadian Federation of Agriculture (CFA) which represents over 190,000 farms raises serious concerns about the tariffs’ potential to disrupt well-established supply chains, leading to higher consumer prices and weakening the competitive edge of North American agricultural industries. Although Canada and the United States agreed on February 3, 2025, to postpone imposing their respective tariffs on imports, uncertainty remains regarding the long-term implications of these policies and the possibility of future revisions. The CFA emphasizes that efforts are underway to collaborate with the government in developing strategies to support affected farmers and agricultural businesses. The aim is to provide necessary assistance to industries as they manage economic challenges induced by the tariffs
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