CHARLEBOIS: Make no mistake, Canada still at war with world’s largest markets

“While Trump’s latest tariffs spared North American food trade, Canada remains entangled in costly disputes with China, India, and the U.S.—and our agri-food sector can’t afford to stay on the defensive.”

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Canada may still be reeling from a bout of political and diplomatic shock—call it Post-Disruption Stress Disorder (PDSD)—following the April 2 announcement in the Rose Garden by President Trump.

But for both Canada and Mexico, the news was less damaging than feared. Despite the sweeping “Liberation Day” tariffs unveiled that day, our two nations were spared. So were American grocery shoppers.

That’s no small detail. Combined, Canada and Mexico export more than $100 billion worth of food to the United States annually. Avoiding new tariffs means food price inflation in the U.S. will remain under control—for now. And that’s good news for everyone. Food affordability remains top of mind for policymakers, and price stability benefits both producers and consumers across North America.

While the Trump administration has drawn a protective circle around the continent, the same can’t be said for Asia-Pacific nations. Vietnam, China, Thailand, Indonesia, and Bangladesh now face new tariffs exceeding 30%, with China singled out in what appeared to be a direct strike at its emerging economic influence. Europe is also dismayed by the entire affair. The message from Washington was clear: North America is different, and China and Europe are the targets.

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For Canada’s agri-food sector, April 2 offered a moment of clarity. Farmers—who are price-takers in the global marketplace—won’t have to absorb the cost of new U.S. tariffs, at least for now. Nor will food manufacturers be forced to consider relocating south of the border in response to punitive trade measures.

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But make no mistake: geopolitical roadblocks remain.

Canada still faces significant trade challenges from major partners. Existing U.S. tariffs have not been fully dismantled. A 25% duty remains on non-USMCA-compliant goods, and certain Canadian energy and potash exports continue to face a 10% tariff. In response, Canada imposed retaliatory tariffs in March 2025 on over $20 billion worth of American imports, including $5.5 billion in agri-food products.

China followed suit, targeting over $2.6 billion in Canadian agri-food exports with tariffs tied to broader diplomatic tensions—this time, over electric vehicles. A 100% tariff now applies to Canadian canola oil, oil cakes, and peas, while aquatic products such as lobster and pork face a 25% duty. India, meanwhile, maintains a longstanding 30% tariff on Canadian lentil exports—a significant burden for our pulse producers. According to the Canadian Agri-Food Trade Alliance (CAFTA), eliminating these barriers could boost our exports to India by 147% within five years.

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Put simply, Canada is now locked in trade disputes with the world’s two largest economies—China and the United States—as well as the world’s most populous country, India. In at least two of these cases, Canada was the initiator. These trade frictions highlight the volatility—and complexity—of exporting Canadian food in an era of rising protectionism and shifting alliances.

We are playing geopolitical chess—and it’s a game we must get better at.

Encouragingly, recent comments from Mark Carney suggest a more measured approach. Unlike his predecessor, Carney appears to favour calibrated, targeted responses over populist, dollar-for-dollar countermeasures. For instance, he confirmed this week that Canada would not retaliate against U.S. food imports. That’s the right call. Despite calls from the “Elbows Up” crowd for hardline tactics, imposing tariffs on food ultimately hurts Canadians.

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That said, President Trump did send a blunt message to our supply-managed dairy sector: adapt or be left behind. It was the only sector he chose to single out—eggs and poultry were conspicuously absent. While the federal government once played a leadership role in managing sector transitions, that time appears to have passed. The responsibility now lies with the sector itself. Remaining idle is no longer an option.

Meanwhile, Canadian consumers have grown increasingly assertive. The “Buy Canadian” movement shows no signs of slowing. Distrust toward President Trump remains high, but we cannot afford to let emotion guide policy. As a trading nation, Canada’s wealth is deeply rooted in international commerce. That isn’t going to change.

Dr. Sylvain Charlebois is the director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast.

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