Key points
- US supplies 67pc of Canada’s vegetable imports
- Canada relies on US for 36pc of its fruit imports
- Trump slapped 25pc tariffs on Canadian and Mexican goods
ISLAMABAD: Less than a week after coming into effect, US President Donald Trump’s tariffs on its biggest trading partners – Canada, Mexico and China – have started hurting global food supply chains.
Despite being prepared for potential supply chain disruptions more than ever, farmers and businesses in more integrated economies – like the US and Canada – face challenges that are too complex to be navigated.
According to Bloomberg, Donald Trump’s trade war is causing chaos for farmers and food producers on both sides of the US-Canada border.
Businesses are reportedly grappling with challenges like disentangling interconnected supply chains.
Tariffs and retaliations
The US president slapped 25 per cent tariffs on most Canadian and Mexican goods on Tuesday.
The move prompted Canada to respond with its own 25 per cent levies on $30 billion (US$20.9 billion) worth of products, including on orange juice, coffee and fruit.
The same week also saw the ground being set for the Trump administration’s relationship with China as the latter has announced retaliatory measures on US coal, liquid natural gas (LNG), and agricultural machinery.
China responded immediately, announcing additional tariffs of 10 to 15 per cent on certain US imports from March 10 and a series of new export restrictions for designated US entities.
Later, it raised complaints about the US tariffs with the World Trade Organisation, according to Reuters.
Moreover, the US Postal Service is declining to accept parcels from China or Hong Kong amid a row over the so-called “de minimis” tax loophole, according to Allianz Global Investor.
Given Trump’s unpredictable nature, there are likely to be many twists and turns in the coming months and years, reports.
Disentangling is the challenge
Particularly, the US-Canada food supply chain is more entangled than others as farmers have already started feeling the pinch of Trump’s tariffs.
“This is the biggest challenge we’ve ever faced, and I’ve been doing this for over 20 years,” said John Nickel, a Manitoba hog producer who sells exclusively to the US, while speaking to Bloomberg.
His first of two weekly shipments of piglets crossed the border tariff-free on Monday, but he doesn’t know whether a 25 per cent markup will appear on the invoice for the animals he sent Thursday morning.
According to data from Canada Food Flows, the US supplies 67 per cent of Canada’s vegetable imports and 36 per cent of its fruit imports.
Nearly 95 per cent of Alberta’s imported spinach came from California and Arizona in 2022, with Mexico supplying less than 3 per cent and neighbouring British Columbia providing just 1.5 per cent.
Three-quarters of its imported lettuce came from those two US states.
Challenges for perishable foods
For perishable foods, shipment duration and costs are some of the biggest challenges to sourcing from other countries rather than the US.
China is imposing tariffs of up to 15 per cent on a wide array of key US farm exports, including American-grown chicken, pork, soy and beef.
It also expanded the number of US companies subject to export controls and other restrictions by about two dozen.
Experts say consumers and businesses will be the hardest hit.
