Tariffs Day 1 | Trade war commences as Canadian agricultural sector braces

Glacier FarmMedia—As of March 4, 2025 U.S. president Donald Trump’s threat of imposing a 25 per cent tariff on Canadian goods has become a reality.

Canada has immediately applied retaliatory tariffs, but the true scope of the fallout from this action is yet to be determined.

Most experts agree that Canadian agriculture will suffer.

In 2023 Canada sent more than US $40 billion of agricultural goods to the U.S., chief among them commodities like beef, pork and canola oil. And Canada is the No. 2 market for U.S. agricultural exports with sales of US $28.4 billion in 2023, using data from the U.S. Department of Agriculture.

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The politics

Reuters news service reported this morning that U.S. President Donald Trump’s new 25 per cent tariffs on imports from Mexico and Canada took effect, along with a doubling of duties on Chinese goods to 20 per cent, sparking trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.

The tariff actions, which could upend nearly $2.2 trillion in annual U.S. trade with its top three trading partners, went live at 12:01 a.m. EST. Trump declared that all three countries had failed to do enough to stem the flow of the deadly fentanyl opioid and its precursor chemicals into the U.S.

Glacier FarmMedia correspondent Jonah Grignon reported Prime Minister Justin Trudeau said the federal government is working on supports for Canadians impacted by U.S. tariffs and seeking new markets for exports.

Trudeau told media on Tuesday morning that Canada would be moving forward with retaliatory 25 per cent tariffs on $30 billion worth of U.S. goods. Tariffs will be added on a further $125 billion worth of products in 21 days if the U.S. doesn’t back down.

“I won’t sugar-coat it,” said Trudeau. “This is gonna be tough, even though we’re all gonna pull together.”

“But Canada, make no mistake,” the Prime Minister continued, “no matter how long this lasts, no matter what the cost, the federal government and other orders of government will be there for you. We will protect Canadian jobs. We will take measures to prevent predatory behaviour that threatens Canadian companies.”

Canada must retaliate against U.S. tariffs, and retaliatory tariffs should fund tax cuts, Conservative leader Pierre Poilievre also said on Tuesday.

“I’d like to speak to the millions of Canadians who are anxious today,” Poilievre said, addressing media on Parliament Hill. “To the auto workers, the forestry workers, the steel and aluminum workers, the mining and energy workers, the truckers, the farmers. To all of you who get out of bed before the sun rises and do the labour of the nation: you’re afraid right now, and I understand.”

“I want you to know I will fight for you. I will fight for your job. I will fight for your family.”

“First, we must retaliate,” Poilievre said, “targeting American goods in the following order: A, goods that we can make ourselves; B, goods we don’t need; and C, goods we can get from elsewhere.”

“Second counter-tariffs must not be a cash-cow for the government,” he continued. “Almost every penny of the tariffs collected should go to tax cuts, with a small sum set aside for targeted relief of workers hardest hit by the trade war.”

International response

China retaliated swiftly with hikes to import levies covering USD$21 billion worth of American agricultural and food products, moving the world’s top two economies a step closer towards an all-out trade war.

Beijing also slapped export and investment curbs on 25 U.S. firms, on grounds of national security, but, unlike when it retaliated against the Trump administration’s February 4 tariffs, this time avoided punishing any household names.

Follow all our coverage of the tariffs situation here

“Trying to exert extreme pressure on China is a miscalculation and a mistake,” a foreign ministry spokesperson told a press conference in Beijing, adding that China had never succumbed to bullying or coercion.

Mexico has not yet stated its retaliatory tariffs.

Calls for action

The Canadian Federation of Agriculture was one of the first farm groups out of the gate, calling for the federal government to take immediate action to help farmers weather a continental trade war.

“Canadian farmers cannot afford prolonged uncertainty,” said CFA president Keith Currie in a statement posted to X.

The CFA said the U.S. tariffs will have serious negative impacts on farmers, businesses and consumers on both sides of the border.

“Our agricultural industries are deeply integrated—not only as trading partners but also as suppliers of essential inputs like fertilizer,” Currie said. “A trade dispute between Canada and the U.S. benefits no one except our global competitors.”

Strong, diplomatic leadership is needed to resolve the conflict, he added.

Canadian grain farmers are bracing for significant economic hardship following the United States’ decision to impose a 25 per cent tariff on Canadian grain and grain products.

The Grain Growers of Canada urged the Canadian government to take immediate action to eliminate the tariffs, highlighting the potential for widespread market instability, increased financial burdens on Canadian crop producers and increased food costs for American consumers.

The newly implemented tariffs threaten a vital trade relationship, with Canada exporting more than $17 billion worth of grain and grain products to the U.S. annually.

Kyle Larkin, executive director of GGC, expressed deep concern.

“Tariffs of this magnitude will put family run grain farms at risk by introducing widespread market uncertainty,” he said.

Canada, which exports more than 70 per cent of its grain production globally, relies heavily on international markets. The tariffs are expected to drive down farmgate prices for key crops such as wheat, canola, oats, barley, and pulses, making it increasingly difficult for farmers to remain financially viable.

“As price takers, grain farmers are at the whim of the global markets that we export to,” said Tara Sawyer, chair of GGC and an Alberta grain farmer.

The canola sector also said U.S. tariffs will levy considerable economic pain throughout that value chain.

“The U.S. decision to go forward with 25 per cent tariffs on Canadian-grown canola and canola products will be felt across the canola value chain, with devastating impacts on farmers, input providers, canola crushing activities, and exports of canola seed, oil, and meal,” said Chris Davison, Canola Council of Canada (CCC) president and CEO, in a media release.

The U.S. is Canada’s number one market for canola exports and also a market that is highly integrated with the Canadian canola industry. Total export value in 2023 was $8.6 billion and in 2024 reached $7.7 billion, with record high volumes including 3.3 million tonnes of canola oil and 3.8 million tonnes of canola meal.

The national canola growers’ group also weighed in.

“The uncertainty created by this situation continues to impact farmers as they inch closer to planting the 2025 crop,” said Rick White, Canadian Canola Growers Association (CCGA) president and CEO. “The damaging blow caused by tariffs will be felt by every canola farmer, starting with the price they receive at delivery and will extend to the full range of their operations, ultimately reducing farm profitability.”

A recent analysis completed by the CCC on the impact Canadian-grown canola has on the U.S. economy also draws attention to the economic benefits the U.S. derives from the Canadian canola industry, which averages US$11.2 billion per year and includes US$1.2 billion in wages.

Pork industry groups across Canada said they’re engaged in serious discussions with the federal and provincial governments over how to protect producers as best they can from U.S. tariffs.

“The Canadian Pork Council is actively engaged in discussions with the federal government to assess the potential impacts of the U.S. tariffs on Canada’s pork industry,” said René Roy, chair of Canadian Pork Council, in an email to the Manitoba Co-operator. “Our priority is to safeguard the competitiveness of Canadian pork producers and maintain stability across the sector. We continue to advocate for solutions that will mitigate financial strain and protect market access for our producers.”

Cam Dahl, general manager of Manitoba Pork, said they are looking at how to protect producers and others who work in the pork industry. He said he couldn’t share the details of discussions taking place with the Province of Manitoba or with Ottawa, or what potential relief efforts for producers might include.

“How do we protect those jobs, so that when we come into a recovery when the tariffs are lifted, they’re still there?” Dahl said. “I don’t know the answer to that yet