BERLIN — What could tariff wars mean for global fresh produce trading partners? It was a key conversation at the recent Fruit Logistica trade show, which took place Feb. 5-7, just days after President Donald Trump ordered a 25% additional tariff on imports from Mexico and Canada, later pushing pause on those tariffs for 30 days.
On the show floor, The Packer spoke with Ron Lemaire, president of the Canadian Produce Marketing Association, to get his take on what’s at stake and what commodities may be impacted most.
What’s the current size of the market — how much produce does Canada export to the U.S. and how much produce does Canada import from the U.S.?
Ron Lemaire: We have quite a dynamic market in North America right now. We receive in Canada just over $5 billion worth of U.S. product — fresh fruits and vegetables — and Canada exports to the U.S. just over $4 billion, so from a Canadian perspective, we are actually at a trade deficit with the U.S. on our fruit and vegetable trade.
Trump has pushed pause on tariffs that would include produce, but only for 30 days. What’s at stake for Canadian produce if these go into effect?
There’s a significant risk for a lot of our commodities in Canada that do enjoy a trading relationship with the U.S., especially when we look at the greenhouse industry. Ontario greenhouses ship about 80% to 85% of their product to the U.S., and they’ve integrated their business strategy having Canadian and U.S. operations.
Tariff systems in that sector would be dramatically consequential to that industry — [we’d be] looking at a change in product flow and potential loss of business and employment.
If we look at the entire market in Canada, we would see potential retaliatory tariffs from the Canadian government, as we saw initially proposed, and that would impact citrus, cherries and a range of other products, so in the end, only driving up the end cost of food and/or putting increased pressure back on the farmer to try and absorb those 25% tariffs into their margins, which we know is impossible.
The key here is, how do we move forward with a strategy that looks at a tariff-free environment but still builds on sound science and clarity of contractual certainty for building a market into the future?
How vital is a strong trade relationship between Canada and the U.S.?
Extremely vital. We have a lot of product meeting Canadian demands when we’re not in season. We function in North America because of the perishability of our product. We move leafy greens; we move strawberries; we move blueberries — highly perishable products in a very short window. When you have a five-day shipping period from California to Canada, you enjoy premium freshness, premium quality, and you’re able to manage price effectively.
If we need to look at a broader global perspective to start bringing product in from around the world, it changes trading channels and trade flows. It changes the modeling of how we actually operate in the country, and there will be a hiccup relative to the timing of business relationships we currently have today and [a need to] increase imports coming from other countries around the world to fill a gap that was satisfied by an integrated North American framework.
Our key is: How do we build out and ensure we are integrated within North America? Building upon success and relationships we’ve had for generations in the produce industry and fulfill other obligations with our partners from around the world. That system has been proven to be successful, and we need to continue to reinforce that relative to ongoing success in the future.
Some are saying this is pre-negotiations to the United States-Mexico-Canada Agreement. When you look at USMCA, is it a valuable trade deal for Canadian growers? (See video below.)
