Carney dropped the ball on tariffs

A 35 per cent U.S. tariff slams Canadian agri-food and puts farmers, jobs and grocery bills at risk

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Canada has stumbled into its worst trade crisis in a generation.

On Aug. 1, while Mexico secured a reprieve, Ottawa failed to secure a deal before the tariff deadline, and now Canadian agri-food producers face a crushing 35 per cent U.S. tariff. For farmers and consumers alike, this isn’t a policy tweak. It’s a gut punch.

A tariff this steep is almost unheard of between close trading partners. It effectively prices many Canadian goods out of the U.S. market overnight.

Prime Minister Mark Carney—the seasoned economist who campaigned on his negotiating acumen and international gravitas—is failing. Instead of delivering results, Parliament was sent home for the summer, and Ottawa’s silence echoed through what is arguably Canada’s most consequential trade dispute in a generation.

To be clear, not all food exports are affected. Products covered under USMCA quotas—dairy, poultry and some meat—remain exempt. But for producers of grains, oilseeds, processed foods and niche value-added products, this 35 per cent tariff is a major blow.

Margins in agri-food are notoriously thin. For many exporters, the choice is binary: absorb the cost or exit the U.S. market. Either path reduces revenues, heightens the risk of layoffs and weakens Canada’s competitive position. With the U.S. absorbing over half of our agri-food exports annually, this is no minor hiccup: it’s a strategic failure. No other market comes close to absorbing that volume, meaning Canadian farmers have few real alternatives if the U.S. door slams shut.

This U.S. tariff is part of a troubling pattern. Canadian farmers are already facing stiff tariffs in other key markets. India continues to impose duties on Canadian lentils and pulses, while China maintains restrictions and tariffs on pork, canola and lobster. For a trading nation, these accumulating barriers are suffocating, yet Ottawa has focused more on damage control instead of prevention.

Forget the talk of silver linings. Tariffs may occasionally shift some production northward, as in the cocoa and chocolate supply chain, but these are rare exceptions. The real story is one of uncertainty, rising input costs and declining production volumes.

Consumers will feel it at the checkout. That means Canadians could soon be paying more for everyday staples—from bread and pasta to cooking oils and packaged goods—even if those products are made at home. But the damage doesn’t stop there; tariffs also wreak havoc upstream, disrupting input sourcing, contract logistics and production planning. Expect more volatility in prices, sporadic availability of staple ingredients and even empty shelves for certain products.

Compounding this are retaliatory tariffs and ripple effects through global supply chains. Many Canadian food manufacturers depend on imported inputs—machinery, additives, packaging—that are themselves caught in the crossfire. Inflationary pressures will persist, even if headline food inflation slows. These ripple effects are serious, but what makes them catastrophic is Ottawa’s failure to act. What’s most alarming isn’t the tariff itself, but the absence of a coordinated Canadian response.

Washington gave plenty of notice. And yet, no contingency plan emerged, no strategy was communicated and no evidence of serious negotiation surfaced.

Supporters of Bill C-202, which extends tariff protections for supply-managed sectors such as dairy and poultry, may take solace in the temporary shielding it provides. But that’s little comfort for the rest of the agri-food economy, and let’s not pretend supply management is immune to geopolitical pushback. It is, at best, a partial solution in an increasingly complex trade environment.

The bottom line: Canada once led in global trade diplomacy. Today, we are reactive, overly reliant on past frameworks and slow to acknowledge that trade has become a geopolitical chessboard, not a rules-based playground.

The agri-food sector—which accounts for nearly one in nine jobs and close to seven per cent of Canada’s GDP—deserves more than summer recesses and bureaucratic platitudes. It requires decisive leadership, policy agility and a proactive strategy to preserve market access and stabilize domestic food systems.

If Carney hopes to reset the narrative this fall, he’ll need to do far more than issue statements. Targeted tariff relief, short-term support for exposed sectors and a clear diplomatic pathway with Washington must be top priorities. Without this, more markets will close, more family farms will shutter and more grocery bills will climb.

Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.