Farm groups’ response to new Trump tariffs muted

UPDATED—Farm groups’ response has been muted, thus far, in the face of U.S. President Donald Trump’s announced 35 per cent tariffs on Canadian goods.

Trump, in a letter released on social media, told Prime Minister Mark Carney the rate would take effect on August 1, and would go up if Canada retaliated.

Grain Growers of Canada (GGC) Executive Director Kyle Larkin wrote in a post on X “note that USMCA compliant goods, such as grain and grain products, (for now) continue to be tariff free despite the recent announcement.”

Goods under the Canada-US-Mexico Trade Agreement are currently exempted from 25 per cent U.S. tariffs. A White House official said the exemption would likely continue, Reuters reported.

Trump repeats dairy tariff claims

In the letter, Trump specifically mentioned Canadian dairy as a justification.

“Canada charges extraordinary Tariff’s to our Dairy Farmers — up to 400%,” Trump wrote, echoing a claim about supply management often considered misleading.

“That is even assuming our Dairy Farmers even have access to sell their products to the people of Canada. The Trade Deficit is a major threat to our Economy and, indeed, our national security!” the president said.

This could signal Trump’s use of supply management as a further negotiating tactic, said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.

“The economic stakes are low—but politically, supply management is the perfect wedge issue he can use to get what he really wants,” Charlebois said in a post to X on Friday.

Carney has previously said supply management is “off the table” and it would never be part of negotiations with Trump. Parliament has also passed legislation designed to protect supply management during trade talks.

Canadian farmers could feel downstream effects

Apart from their effects on agricultural goods, the previous tariffs have the potential for other downstream effects on Canadian farmers, such as the cost of equipment.

Farmers have not felt the brunt of this on equipment and machinery prices but could “if American tariffs on Canadian steel and aluminum continue,” Grain Growers of Canada said in a written statement. “These goods are used in the manufacturing of American farm equipment, much of which is purchased by Canadian grain farmers.”

The majority of farm equipment falls under CUSMA so it’s not being tariffed, said Nancy Mace, VP of North American Equipment Dealers Association (NAEDA). However, she said she’s concerned about retaliatory tariffs potentially creating an “escalation of issues.”