U.S. President Donald Trump says Canadian fertilizer being exported south of the border could be hit with significant levies in the future as his administration lays out plans to help American farmers who have been impacted by months of trade uncertainty.
Trump’s comments came at a roundtable in Washington on Monday after he announced a US$12-billion agriculture aid package. He was asked by reporters what his administration’s plan is to help bolster domestic production of fertilizer, much of which is currently imported from Canada.
“A lot of it does come in from Canada, and so we’ll end up putting very severe tariffs on that, if we have to, because that’s the way you want to bolster it here and we can do it here,” said Trump.
Trump’s renewed focus on agriculture comes as many U.S. farmers struggle to sell their crops or plan for the future amid an ongoing trade war with China, as well as continued trade uncertainty with U.S. allies including Canada.
U.S. Agriculture Secretary Brooke Rollins said at the roundtable that becoming less dependent on foreign sources of fertilizer is a top priority for her department, but U.S. farmers currently rely heavily on Canadian potash-based fertilizers for the production of crops like corn and potatoes.
Canada is the world’s largest producer of potash, and more than 95 per cent of Canadian potash is exported, according to Fertilizer Canada, which also notes that “well over half” of all exported Canadian fertilizer goes to American farms.
‘Not a welcome comment’
For Veronica Nigh, senior economist at the U.S.-based Fertilizer Institute, Trump’s latest tariff threat “feels a little bit like déjà vu.”
“It feels like we had to explain to the world how important Canadian reserves and exports of potash globally, and specifically to the U.S., were earlier this year when we were talking tariffs, and so of course this is not a welcome comment from the president,” she told CTV News Channel Tuesday.
After Trump announced blanket 25 per cent tariffs on all Canadian goods entering the U.S. in February, which prompted retaliatory measures from Ottawa, both Canadian and U.S. farmers faced soaring fertilizer prices.
Between Jan. 3 and Feb. 28, the price of potash rose from US$303 per short ton to $348 amid Trump’s many tariff threats and announcements, Reuters reported in March.
The price shock impacted farmers across the U.S. Midwest who were preparing to plant in the spring, and in March, Trump lowered tariffs on fertilizer products to 10 per cent following outcry from industry groups and lawmakers in farm states often controlled by Republicans.
“As all Canadians know, and most Americans I think at this point, the U.S. is incredibly reliant on Canada for our potash needs which (contains) one of the three critical nutrients every plant needs,” Nigh said.
“And then there’s a lot of cross-border trade that occurs in many other fertilizers that are really beneficial both to Canada and to the U.S. and the growers on both sides of the border.”
Nigh said that if prohibitive tariffs are reintroduced for Canadian fertilizers entering the U.S., it will “clearly mean additional costs” for U.S. farmers. She also noted that the U.S. isn’t currently a major potash producer, and outside of Canada, there are few traditional American allies who export it.
“On the side of potash, of course there are only three major exporters in the world; Russia and Belarus are the other two sources of major potash reserves,” said Nigh.
“I think most Americans would agree that we’d much rather get our potash from our friends in Canada than from Russia and Belarus, so it would certainly mean some pretty significant changes I think in the flow of product to the U.S. and it’s hard to really see an upside.”
Although relations between Ottawa and Washington have improved somewhat in recent months, a new trade deal has yet to be struck between Canada and the U.S.
When asked Sunday if he’d resume trade talks with Canada, which he halted indefinitely in October, Trump responded by saying: “We’ll see.”
With files from Reuters and The Canadian Press
