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Navigating Trump’s tariff threat
Canadian greenhouse sector urged to remain agile, build resilience into strategies
December 10, 2024 By Amy Kouniakis
Getty Images As 2024 comes to an end, the threat of potentially crippling tariffs being imposed on Canadian exports to the U.S. have dimmed some optimism for the new year.
Last month, U.S. president-elect announced that once he’s back in office, he will impose 25 per cent tariffs on all goods imported into the country from Canada and Mexico, unless both countries take action to strengthen security on their respective borders to curb the flow of migrants and illicit drugs into the U.S.
“If horticulture is affected by this tax, we could see several companies reduce their production, leading to layoffs,” Quebec-based agronomist and greenhouse consultant, Michel Senécal, told Greenhouse Canada recently.
There’s no denying just how devastating a 25 per cent tariff on Canadian goods would have on business conditions on both sides of the border. Prime Minister Justin Trudeau has said the proposed tariffs would ‘be devastating’ for the economy. In an indication that Trump’s threat is being taken very seriously, Trudeau was even prompted to travel to Trump’s resort in Florida to try and solidify ties with our neighbour to the south.
We will have to wait and see how things play out beyond Inauguration Day, but in the meantime, there are some precautions those in the Canadian commercial greenhouse sector can take to manage their uncertainty and prepare for changes coming down the pipeline.
The geopolitical landscape will be a challenge for the next year and there will be risks associated with that, cautions Amanda Norris, senior economist with Farm Credit Canada (FCC). “Tariffs, trade barriers, labour disputes and those factors are really beyond the sector’s immediate control.
“What I can say, without knowing exactly what those are going to be, is that success will come to those businesses that really build resilience into their strategies.”
She advises growers to stay agile and adjust rapidly to change by “investing in data capabilities, forming relationships and partnerships and really accelerating the adoption of those innovative practices.”
While it’s too soon to say how the wind will blow after Jan. 20, there is hope that calmer heads will prevail.
“There’s so much two-way trade, that there is a lot to be lost by taking an extremely hard stance,” said Andrew Morse, executive director, Flowers Canada (Ontario).
In the meantime, given the exchange rate, which as of publication was .71 CAD to USD, buying from Canadian producers remains quite favorable for U.S. companies.
“The Canadian dollar has depreciated against the U.S. dollar recently, and we expect it to remain pretty flat for the next little while,” said Norris. “The slightly weaker Canadian dollar compared to the U.S. is a potential benefit for the sector when looking at exports.”
The CBC reports that Trudeau is expected to announce a new plan to beef up border security by Christmas, in an effort to allay Trump’s border concerns, but he said that in the event the president-elect’s threat comes to pass, Canada, which has navigated one Trump presidency already, will be in a good position respond in kind.
EDS NOTE: Portions of this article are featured in Greenhouse Canada‘s upcoming State of the Industry report, in our January 2025 issue. Check back soon to read more on what 2025 holds and how Canada’s greenhouse sector is expected to fare.
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