Albertans brace for impact of U.S. tariffs
Tariffs mean farmers and ranchers face higher costs for machinery, equipment
The trade battle between Canada and the U.S. is casting a shadow over Alberta’s agriculture industry, as farmers and ranchers face tariffs on input costs and increased uncertainty in the market.
While raw agricultural commodities have so far been excluded from United States President Donald Trump’s crosshairs as he seeks to disrupt the North American status quo on trade, Canadian producers are already feeling the effects of the burgeoning trade war.
Canadian retaliatory tariffs on U.S. steel and aluminum that came into effect on July 1, this country ’s response to an earlier move by the U.S. to impose import duties of 25 per cent and 10 per cent respectively on Canadian steel and aluminum, mean the cost of everything from tractors and combines to cattle chutes and equine pens is rising.
“Our machinery and a lot of our agricultural equipment — basically everything is made with steel and it does come from across the line,” said Brad Osadczuk, who ranches in southeast Alberta and was helping to showcase the province’s beef industry at the Calgary Stampede on Friday.
“It’s just hearsay, but I’m hearing people say they ’re seeing as high as a 30 per cent markup on some stuff coming across the border.”
“It’s on everybody’s mind,” said Walter Moebis, a grain farmer from north of Swift Current, Sask., who was also volunteering at Stampede. “Farmers are at the mercy of the market. Is it going to escalate? Is there more of this coming? Nobody has a definite answer and those are the kind of things that are putting stress on farmers.”
Alberta Agriculture Minister Oneil Carlier said he has spoken to several farm equipment dealerships in the province, who have told him their costs have already gone up.
“We had a really good year last year where there were record sales set in farm machinery,” he said. “I’m a little concerned that there’s going to be a bit of a downturn on that just because of what’s going on down in the States.”
Carlier, who was at Stampede to announce $90 million in federalprovincial funding for market growth, diversification, agriculture literacy and education programs (part of a five-year partnership on agriculture initiatives), said the overall mood among industry representatives taking part in the 10-day event is positive.
He said international visitors, including a delegation from the United Arab Emirates, have visited Stampede this week to learn more about Alberta agricultural exports and make contacts for future investment.
“But my biggest concern is the uncertainty. NAFTA and other trade agreements between the three countries (Canada, the U.S., and Mexico) work great for agriculture,” Carlier said. “My wish for anybody, the federal government and the American government as well ... is for Pete’s sake, don’t mess it up.”
Canada’s agriculture industry hit another trade-related snag in June, when a small amount of unapproved genetically modified wheat was found growing in a ditch in southern Alberta. The discovery led Japan — which is Canada’s second-largest buyer of wheat, importing $1.4 billion tonnes from this country last year alone — to temporarily suspend imports. Genetically modified wheat is not approved for commercial use in Canada.
Carlier declined to speculate on when Japan might lift the restrictions, but said he is optimistic about a quick resolution
“I had dinner with the consul general of Japan (Thursday) night and of course we discussed that,” he said. “I’m confident it will be over soon.”
The CFIA has said that it has conducted extensive testing and is confident the GMO wheat is isolated to the site where it was found and poses no food safety risk.