Tariffs are set to have a big impact on commodities, with the grain crops across Canada especially feeling the pinch.
With 25 per cent tariffs being put on both sides of the border following the US's original tariffs that came into effect at midnight, prices are expected to rise across the board.
Kyle Larkin, the Executive Director at Grain Growers Canada, says the tariffs will be devastating on both sides of the border.
"We're raising the alarm of these 25 per cent tariffs on Canadian grain and grain products. They're gonna have a devastating impact on Canadian grain farmers. But they're equally going to have a devastating impact on American consumers."
"Look, the US imports over $17 billion worth of Canadian grain and grain products, so that includes wheat, barley, oats, canola and canola oil, some pulses, it includes all the grains that we produce here in here in Canada and they use those grains for their own domestic food security in the USA and also their food affordability needs. So this 25 per cent tariff is in effect a 25 per cent tax on American consumers who purchase groceries every day."
For farmers, they'll be feeling the impacts as markets will be more volatile following the new trade situation.
It's going to have a pretty major impact on Canadian grain farmers. As folks know, farmers rely on international markets for the prices that they get for their various commodities when they sell to the grain elevator," said Larkin. "So it's just a simple calculation of supply and demand. This is likely to depress and deflate prices for farmers across the prairies. Unfortunately, any uncertainty, especially with our largest trading partner, has a direct impact on what farmers get at the farm gate."
Larkin says he expects to see more focus on international markets in the future as trade looks increasingly unstable with our southern neighbour.
"Any time there's uncertainty in the grain markets, there's always a shift in where the grain flows. So we saw a very similar circumstance when China banned canola a few years ago from being imported into their country. Canola still found different ways to get into China because the demand was still there. But certainly, canola found new markets around the world, so we're likely to see a similar scenario take place."
"But the challenge is the US is our largest trading partner by far. The trade channels are well established, you know, either training or boating grain down to the US has happened for decades. There's not going to be a dramatic shift overnight, but if these tariffs do continue, then we'll probably see a shift to other markets internationally."
With the tariffs still fresh, Larkin says he hopes to see those come off before any real damage is done.
"We're urging the Canadian government to engage with their American counterparts as much and as often as possible. This is a serious issue not only for Canadians and Canadian grain farmers, but it's a massive issue for Canada's economy. So not only are the prices of grain gonna be impacted, but also the economic turmoil that we're likely to see over the next few weeks because of these is going to be insurmountable, so the Canadian government needs to engage as often as possible."
There could be a line through the tariffs if Canada is able to speak to the states, says Larkin.
"Not only at the federal level in the US, but also at the state level, there's a lot of state governors and senators and members of Congress who are not in line with these tariffs. They understand that it's going to have an impact on consumers, but Canadian officials also need to highlight the impact it's going to have on American farmers, American consumers, everyday Americans at the grocery store on their farms. You know, another piece I would highlight is these tariffs are also being put on Canadian potash, which we know American farmers rely on a lot of to grow their crops. So we'll see what happens over the next few weeks."