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Canada’s tariffs: How it could affect Minnesota
Canada has announced retaliatory tariffs on U.S. imports to combat ones imposed by the Trump administration, saying they intend to match the taxes "dollar for dollar." FOX 9’s Emily Pofahl has the latest on the potential effect it could have on the relationship with Minnesota’s largest trading partner.
MINNEAPOLIS (FOX 9) - Canada is hitting back in President Trump’s tariff war — and Minnesota farmers are caught in the middle.
Canada's finance minister announced retaliatory tariffs on $20 billion worth of U.S. goods Tuesday, escalating the trade war between the two countries after President Trump's 50-percent tariffs on Canadian imports took effect Saturday.
Canada strikes back with $20 billion in tariffs
What we know:
Canadian Finance Minister François-Philippe Champagne made the announcement Tuesday, saying the country would match U.S. tariffs head-on.
"Canada will match the United States tariffs dollar for dollar rate for rate," said Champagne.
The retaliatory tariffs are set to kick in Sept. 8. Experts expect price hikes across several sectors, including steel, agriculture, dairy and lumber.
What they're saying:
Jacob Walker, an International Trade Consultant at Peacock Tariff Consulting, said Americans and Canadians can expect the tariffs to last.
"It has the teeth to stay," Walker said of the news Tuesday,
On what that means for Minnesota specifically — a state that exports about $5.5 billion in goods to Canada each year — Walker didn't mince words.
"The likelihood that Minnesota has built up the infrastructure to withstand the gap left from Canadian exports, it's unlikely. It's going to hurt," said Walker.
Minnesota farmers feel the squeeze
Local perspective:
Gary Wertish, who leads the Minnesota Farmers Union, says Minnesota exports about $5.5 billion dollars in goods to Canada each year.
"Minnesota's number one trading partner is Canada," said Wertish.
He says previous tariffs already drove up costs for farm equipment and fertilizer. Now, with the trade relationship between the U.S. and Canada growing more strained, farmers are being hit from both directions.
"It's putting downward pressure on our prices that we are able to sell the products for. So we're getting squeezed on both ends," said Wertish.
What we don't know:
The consequences of previous tariffs are already showing up in a significant way. Before foreclosing on a Minnesota farm, creditors are required by state law to go through a mediation period with the farm’s owner.
Wertish said more Minnesota farmers have entered that mediation process this year than in the last three years combined. Wertish attributes the troubling statistic, at least partly, to tariff impacts.
Wertish is calling for politicians to work together to find a more stable solution for ensuring fair trade practices.
"It’s almost like the weather forecast. It changes day to day," he said.
Not everyone is sounding the alarm, though. The National Milk Producers Federation thanked the Trump administration Tuesday for continuing to pressure Canada over what it calls unfair dairy trade practices.
"We appreciate the Administration’s persistence in standing up for American dairy producers and exporters who have waited far too long for Canada to live up to its promises," said Krysta Harden, president and CEO of U.S. Dairy Export Council. "Canada has had plenty of chances to fix its unfair market access practices and close the loopholes it’s used to dodge its dairy commitments under the U.S.-Mexico-Canada Agreement. This weekend’s action makes clear that patience has run out. We look forward to continuing to work with the Administration until Canada resolves these issues and America’s dairy farmers and exporters see the full benefits USMCA promised."