Canadian agriculture faces serious risks as trade tensions with the United States escalate, but two farm-sector leaders say long-standing business relationships still offer hope for a negotiated settlement.
Canadian counter-tariffs are scheduled to take effect Sept. 8, after the United States imposed 50 percent duties on a range of Canadian products on Aug. 22. Canada plans to impose matching tariffs of 15, 25, and 50 percent on selected American goods.
Dr. Al Mussell, research lead and founder of Agri-Food Economic Systems and a fellow-in-residence at the C.D. Howe Institute, said it would be naive to expect the dispute will not escalate.
The consequences could reach both sides of the farm gate. Canadian producers depend on American markets for agricultural exports and purchase machinery, equipment, ingredients, and other production inputs from the United States.
Mussell nevertheless finds real optimism in the deep commercial relationships developed over decades.
Canadian farmers and agri-food businesses have established close connections with American customers, suppliers and companies. Those relationships have supported remarkable trading arrangements and may eventually provide a foundation for resolving the dispute, he said.
The difficulty is that trade has become heavily politicized. Businesses that never expected border relations to deteriorate so sharply are now examining their exposure and searching for alternatives.
Mussell said the current period is unlike anything experienced by his generation or the one preceding it. Agriculture must take its vulnerabilities seriously and work collectively, whether the concern involves obtaining farm inputs or maintaining markets for Canadian products.
“There’s an old adage among economists that you can forecast an outcome, or you can forecast a timing, but you never do both because you’re bound to be wrong,” Mussell said.
Florian Possberg, a partner with Polar Pork, also hopes Ottawa will move toward a settlement following three federal by-elections won by the governing Liberals.

Possberg said opposition to the United States may have strengthened the government politically in Canada, but questioned whether escalating the dispute will help the country economically.
The American economy is approximately 13 times larger than Canada’s, he said. Canada therefore cannot expect to inflict equal damage through retaliation and has more to lose from a prolonged confrontation.
Possberg called on political leaders to set aside pride and find a resolution.
He said American officials have indicated they want an agreement and appeared to believe the countries were close to one before negotiations collapsed. Possberg hopes the by-election results give the federal government enough political comfort to return to talks rather than continue escalating tensions.
Tariffs are paid by importers and can raise costs throughout supply chains. For agriculture, those costs may appear in equipment, crop inputs, livestock production, food processing and transportation, while lost export access can weaken commodity prices and farm income.
The two men differed somewhat in tone. Mussell emphasized the need for cooperation and drew hope from enduring cross-border relationships. Possberg was more direct in urging Canada to recognize the countries’ unequal economic weight and negotiate.
Both, however, arrived at a similar conclusion: Canadian agriculture needs a workable agreement, not a prolonged escalation. The strength of established relationships offers hope, but farmers need governments to quickly convert that goodwill into practical results. •
— By Harry Siemens