In early December, the provincial government announced its intention to open a trade office in Washington, D.C. in 2025.
“Manitoba has what America needs and a trade office in the heart of the capital will strengthen trade ties and protect Manitoba jobs as we work with the incoming Trump administration,” said Premier Wab Kinew Premier in a state of the province address. “It’s one piece of our economic development strategy and it’s part of how we speak to the incoming Trump administration in their language. We’re focused on boosting productivity, attracting investment, and job creation.”
This announcement follows on the heels of a recent declaration by incoming U.S. president Donald Trump that he intends to soon impose a tariff on all products coming into the United States from Canada and Mexico.
Economic Ripple Effect of Tariffs
According to the Manitoba Chamber of Commerce (MCC), the need for dedicated representation and trade influence in Washington has never been greater.
“With the potential for significant economic disruption, we urge the prime minister and Canada’s premiers to prioritize this issue at the highest levels,” wrote MCC president Chuck Davidson in a recent press release. “Fostering a stable and equitable trade relationship with the United States is critical to ensuring economic resilience across Canada.”
According to the MCC, Manitoba exported $15.6 billion in goods to the United States in 2023, comprising 72 percent of the province’s total exports.
The imposition of a 10 percent tariff on Canadian goods would cost the federal economy about $30 billion, they say. Should Trump follow through with a threatened 25 percent tariff, the economic impact would be even more severe, disrupting supply chains, inflating costs for both businesses and consumers, and threatening jobs on both sides of the border.
For the MCC, the threat of tariffs undermines decades of cooperation and shared prosperity which was realized through a long-standing and mutually beneficial trade relationship between Canada and the U.S.
Close to 40 American states, they say, consider Canada, and especially Manitoba, as their number one trading partner.
“This is a huge concern from both a business perspective and from a U.S.-Canada relations perspective,” says Davidson. “I think there needs to be a better understanding from Americans and Canadians alike of the importance of our mutually dependent relationship.”
Effect on Local Farmers and Consumers
Jeff Stott is co-owner of Stott Farms, a livestock and grain operation located in Ritchot. From Stott’s perspective, Canadian grain and pork will take the biggest food commodity hit when it comes to cross-border tariffs.
Stott says the farmer won’t notice the impact immediately. Companies like Maple Leaf Foods, for example, will be the first since they have pre-established contracts with local farmers to purchase their products at a specified rate.
“I believe that they’re going to wait it out to see how big the tariff is, how long it stays in place, and what [commodities] will be targeted the most,” says Stott. “Putting [new contracts in place] costs them money too.”
If push comes to shove, Stott believes that new contracts developed to absorb the tariffs will likely result in a significant reduction in the number of farmers willing to accept the hit.
“When Maple Leaf starts getting beaten up [by the market], we are the next group to get beaten up,” says Stott. “Our contracts will be lowered. And anyone that’s built a new barn and has a mortgage, that’s the kind of thing that will be devastating to them.”
Of course, consumers of meat and grain products will take the final hit, including Americans.
“We’re going to tariff them right back, unfortunately,” Stott says. “So everyone’s [pocketbook] will take a 25 percent hit. [People] will stop purchasing the luxury items, and one of those is meat. It’s a luxury item in a lot of people’s lives.”
According to Stott, Canadian grain suffers even more from such volatility than meat exports. A whopping 70 percent of grain produced in Canada is exported around the world.
“A lot of our wheat goes down to the States,” Stott says. “We are completely reliant on export. Whatever happens in the States is not a ripple effect. It’s a [tidal] wave hitting a beach.”
For some consumers, buying local and avoiding imported products may seem like one solution. While it’s always a good mantra to live by, it’s a simplistic and untenable approach when it comes to the greater Canadian economy.
That’s because, these days, the national economy is built on commodity over-production with a heavy reliance on a global market to sustain us.
But for Stott and others, there is still a level of doubt over whether the American threat of tariffs on Canadian goods will actualize. If it does, it won’t be sustainable in the long-term.
Like food, lumber is another major commodity which America imports from Canada.
A 25 percent tariff imposed on Canadian lumber will result in at least a 25 percent cost hike on wood-based building materials for Americans. This becomes especially problematic in a culture where people view home ownership as a basic right, not a luxury.
