Christopher Bonasia
The Advocate

Canada’s farmers would be greatly affected if U.S. president-elect Donald Trump follows through on imposing 25-per-cent tariffs on all imports from Canada and Mexico.

But analysts say the tariffs are likely a negotiating tactic straight out of The Art of the Deal, and warn Canada’s leaders need to present a united front before the agriculture sector becomes collateral damage.

“I think we should expect this kind of aggressive posturing to continue, because it serves president-elect Trump’s interest to do so,” said Meredith Lilly, a professor at Carleton University working on North American trade relations, in a recent webinar hosted by the Canadian Agri-Food Policy Institute.

Lilly added that the Canadian government should prepare for the event that Trump follows through, but also thinks Trump’s aim is to negotiate for stronger border enforcement to clamp down on immigration and fentanyl smuggling. Threatening high tariffs puts the U.S. in a good position to divide the interests of Canada and Mexico before cutting individual deals.

Threats worked in the past

This tactic worked for Trump during the Canada-United States-Mexico Agreement (CUSMA) negotiations in 2018, during which Canada and Mexico focused on issues facing their own individual countries. Canadians were ultimately caught off guard by an announced U.S.-Mexico agreement, after which Trump said ‘we will see’ if Canada can join.

“We got burned going that route last time,” said Carlo Dade, director of the Trade & Investment Centre at the Canada West Foundation.

Canadian lawmakers have been taking the matter seriously — Prime Minister Justin Trudeau flew to meet with Trump almost immediately following the announcement — but the aftermath is already sowing new divisions between Canada and Mexico. Canada seemed to have thrown Mexico “under the bus” by saying drug smuggling and unlawful crossings along the U.S.’s southern border are a more significant problem.

Mexico issued warning

Mexican President Claudia Sheinbaum responded by telling the Associated Press that Canada also has social problems linked to fentanyl use and that “Mexico must be respected, especially by its trading partners.”

But while the main goal for the tariffs may be focused on border policy, it could still very much affect farmers. Canada is the U.S.’s top trading partner for goods and services and it was initially assumed that Canada would be exempt from the steep tariffs the Trump had been hinting at for other countries. Last year, 78 per cent of Canada’s goods were exported to the U.S., where it also sourced almost half of its imports.

Billion in farm trade in play

Many Canadian farmers have business with the U.S., which imported US$40.5 billion of agriculture and agri-food trade goods and services from Canada in 2023. A 25-per-cent tariff on all imports would raise prices in the U.S. and likely stifle that exchange.

But other panelists indicated that divisions within Canada are also threatening the country’s best interests. For one thing, the shifting landscape of the next U.S. presidency will be a central point in Canada’s upcoming federal election, said Meagan Murdoch of Hill + Knowlton Strategies. Candidates might be inclined to take performative tough stances on issues with the U.S., rather than relying on other tactics that may be more effective.

Dade added that Canada has been failing to deliver a unified message to Americans about why the country’s relationship to the U.S. is important. His biggest concern is that there is not going to be a “strong person for everyone to rally around in Canada” as the political parties jockey for power in the coming months. And divisions among provincial premiers isn’t helping.

“We’re making Donald Trump’s job easier for him,” Dade said. “His favourite negotiating tactic is ‘divide and conquer.’ That’s what he’s trying to do with us and Mexico, and that’s what he’s trying to do internally, and we’re falling into it.”