Ahead of the U.S. president-elect’s rapidly approaching inauguration, many Canadians are anxiously awaiting what could be a turbulent start to a second Donald Trump term, as threats of sweeping tariffs continue to dominate headlines.
For a dynamic industry like agriculture, a sector that’s used to planning ahead and adapting to changes in weather and fluctuating commodity prices, the possibility of tariffs coming as soon as Monday is difficult to brace for.
Those with a stake in the beef industry are specifically concerned about how tariffs will impact their highly integrated Canada-U.S. supply chain. Beef production often requires multiple trips back and forth over the border and such levies could cover every trip.
“It has the potential to really be devastating for our industry in Canada,” said Keith Gregory, chair of the Alberta Cattle Feeders’ Association.
He’s also vice-president of Cattleland Feedyards near Strathmore, Alta., a feedlot built in the 1970s that houses over 16,000 cows.
Gregory’s operation is family-owned, his parents purchasing the place in the early 2000s, and he’s been working there for the past 20 years. While he doesn’t buy any cows from the United States, he does ship fat cattle to American businesses.
“It’s causing a lot of stress. It’s causing people to make decisions that they probably otherwise wouldn’t have made. And it’s not just stress for the feedlots, it’s right down to the ranchers,” he said.
He noted some producers are trying to forward contract cattle — a way for sellers and buyers to lock in prices for their livestock ahead of time — in order to maintain expected profits.
With so much uncertainty, this is one of the only measures he believes can be taken right now.
“It’s unfortunate,” he said, after being asked if people like him feel they’re being caught in the crossfire of negotiations that could lead to an all out trade war.
Overall, the agriculture sector generated nearly seven per cent, or $150 billion, of Canada’s gross domestic product (GDP) last year. Notably, beef production contributes around $21.8 billion to Canada’s GDP, on average.
Gregory explained that retaliating against the U.S. by restricting trade could cause an oversupply of livestock, meaning the price Canadian sellers receive for cattle could drop significantly.
Alberta is the source of the majority of Canadian beef exports, and Gregory said the tariff threat is taxing to even try to plan for, considering how intertwined the two countries’ markets are.
“It’s not really an American industry and a Canadian industry.… I’m not sure [Trump] totally understands the ins and outs of our industry.”
Beef was the province’s leading agricultural export to the U.S. at $3.1 billion in 2023, followed by crude canola oil at $1.2 billion, then live cattle ($980.2 million, excluding purebred), processed potatoes ($716.5 million) and oilseed cake and meal ($666.1 million).
The Canada-U.S. trade relationship is the world’s most comprehensive. It supports millions of jobs in both countries and maintains a long-standing alliance between the two nations on more fronts than just financial.
Beef demand growing faster than production
“There shouldn’t be a tariff in the first place,” said Dennis Laycraft, executive vice-president of the Canadian Cattle Association.
He believes the threat is real and that going ahead with the tariff would be the “worst-case scenario” for beef in Canada.
“We haven’t heard anyone talking about the benefits of this. We’ve benefited from an integrated market,” Laycraft told CBC News.
“There’s been quite a recognition that together we’re more competitive. Right now, world beef demand is growing faster than world beef production, and particularly for high-quality, grain-fed beef, and that’s [Canada and the U.S.’s] strength.”
According to Laycraft, Canada and the U.S. have the largest two-way trade in live cattle and beef in the world. It’s why, he said, anything that affects the pricing between the two markets has an immediate impact on the industry as a whole. It’s also why the uncertainty surrounding these tariffs is making it difficult to forecast how the people working in this sector can mitigate harm.
Consumer impact
It’s well-known that a move to enact widespread tariffs could put increasingly negative pressure on Canada’s already strained economy.
However, as the cost of food remains a top-of-mind issue for North Americans across the board, some believe the most immediate and personal economic shock of U.S.-imposed tariffs would be prices at the grocery store.
Ellen Goddard, agricultural economist and professor emerita at the University of Alberta, said that while this would harm the Canadian economy overall, American shoppers can also expect to pay more for their groceries.
“American consumers wanted a change in government for some of the same political reasons that are driving Canadians to want a change in government. They don’t like inflation. They don’t like not being able to afford things. They don’t like seeing the cost of things go up,” said Goddard.
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Images gathered from Reuters, Getty Images, and The Canadian Press.
“In the case of a country choosing to impose tariffs on imports, it’s going to make inflation worse. Not worse here, worse there. So how politically sustainable is it going to be over the longer term?”
‘Hard to make a plan’
In an email statement to CBC News sent Wednesday, Alberta’s Minister of Agriculture and Irrigation RJ Sigurdson said the province does have concerns about possible tariffs, noting Alberta exported $8.9 billion of primary agricultural and value-added products to the United States last year.
“There’s still plenty of unknowns about the possible impact of tariffs, but we will work with the incoming administration and industry to ensure our food producers and processors’ voices are heard,” reads the statement.
Back at the feedlot, Gregory will be watching to see what trade action Trump’s administration embarks on, knowing a simple stroke of the president’s pen could have major repercussions for his business and his livelihood.
“Because we’re not really sure what’s going to happen on Monday, it’s really hard to make a plan,” he said.
