Opinion: Canada’s grain farmers caught in a trade crossfire

Canada’s grain sector is caught in a geopolitical storm. Trade tensions with both the United States and China have left Canadian grain farmers dangerously exposed to economic and financial pressures.

Only a few weeks ago, the American government imposed sweeping tariffs on all Canadian goods, including grain and grain products, under the guise of national security and fentanyl trafficking concerns. Following the lifting of those tariffs, China recently announced their own on Canadian agricultural exports. This trade crossfire threatens to cut Canadian farmers off from two of their most important markets, threatening to put many family farms out of business.

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Trade tensions with the U.S. and China aren’t just rattling markets, they’re shifting the foundations of Canada’s economy. If producers can’t get their grain to market, the damage won’t stop at the farm gate. The fallout will impact food processing, transportation, and rural communities intensely. The government’s ability — or failure — to navigate this crisis will define the future of Canadian agriculture and trade.

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The U.S. tariffs on Canadian goods, currently postponed and set to take effect on April 2, 2025, are among the most severe trade measures imposed in decades. A 25-per-cent tariff will apply to all Canadian agricultural exports, including $17 billion worth of grain and grain products. This won’t just impact producers, but every Canadian, as the sector contributes over $135 billion to our GDP. Now, these unpredictable trade measures threaten to cripple an industry that underpins much of Canada’s economy and global reputation.

Canadian grain farmers are already facing rising input costs, changing weather patterns, and increasing government regulations and taxation. Trade uncertainty with the U.S. market has – and will – push down commodity prices, challenging the razor-thin margins that already exist on family-run grain farms across Canada.

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China’s retaliatory tariffs have only made things worse. A 100-per-cent tariff on Canadian canola meal, canola oil and peas, valued at nearly $1.7 billion effectively shuts Canadian grain producers out of their second-largest market. China is also continuing their anti-dumping investigation into raw canola seed, which if actioned upon, could impact billions of dollars more of product. Without market access, farmers, again, will be left with grain they can’t sell and no clear alternative market to turn to.

The damage isn’t limited to the farm gate. When farmers can’t sell their grain, rural economies dry up. Lower farm incomes, or even losses, mean fewer equipment upgrades, stalled investment in innovation, and thinning margins for grain elevators and processors. The ripple effects will stretch across the value chain, weakening Canada’s competitive edge in global markets.

What’s more concerning is the lack of a clear path forward. Canada’s reliance on U.S. and Chinese markets has left farmers vulnerable to political and diplomatic decisions beyond their control. While the government has raised concerns about the tariffs with both Washington and Beijing, meaningful solutions remain elusive. Canada’s leverage is limited, and dispute resolution through the Canada-United States-Mexico Agreement (CUSMA), if intact, or the World Trade Organization could take years — time Canadian farmers simply don’t have.

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Diversifying export markets is often presented as the solution, but it’s not that simple. Europe and Asia are highly competitive markets. Establishing new trade relationships will require targeted government support, aggressive market development, and long-term strategic investment. In the meantime, Canadian farmers are left twisting in the wind.

Canadian farmers are not asking for protection — they are asking for fairness. A level playing field means ensuring that Canadian grain can compete globally without artificial barriers. The federal government must resolve the trade disputes with the U.S. and China in earnest, build up our domestic processing capacity, and work with the sector to create a long-term strategy for trade diversification.

Canada’s grain sector has weathered trade disputes before, but never before has faced a trade war on two fronts. If the government fails to act, the fallout could reshape Canadian agriculture for decades. The government must decide whether to step up and defend it or risk letting one of Canada’s most vital sectors wither under the weight of foreign pressure.

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Kyle Larkin is executive director of the Grain Growers of Canada.

Letters welcome

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