Liberals have to stop dragging their feet on bruising China tariffs

Opinion

During the first ministers meeting in Saskatoon on Monday, Prime Minister Mark Carney told the premiers around the table that the threat posed by U.S. tariffs means that Canadians must rally behind “nation-building projects” to boost the Canadian economy.

And in the same breath, according to a report by The Toronto Star, he praised the provincial leaders for working together to eliminate interprovincial trade barriers.

“I can’t keep up with the flurry of announcements of free trade agreements between provinces and across the country,” the prime minister said, in reference to to Ontario’s recent deals with Alberta, Manitoba, Saskatchewan, Nova Scotia and Prince Edward Island.

Certainly the Carney government is making many of the correct political noises around that table when it comes to breaking down interprovincial barriers — part of an election promise to counter the financial disaster those tariffs pose to the Canadian economy.

This is hardly surprising. U.S. President Donald Trump and his tariff threats continue to hog the headlines in local and national media. It was only this past Friday that Trump announced his intention to double the tariffs on steel and aluminum imports to 50 per cent, with the increase likely to take effect on Wednesday, barring any last-minute decisions by this reckless president.

The threat to Canada’s economy posed by these unjustified tariffs on Canadian imports to the U.S. are real and require the federal government’s attention.

Thus far, however, the US. president has been silent on Canadian agriculture in his global tariff tirade, with much of agricultural cross-border trade exempted under compliance with the Canada-U.S.-Mexico agreement. Instead, much of the painful financial impact to Canada’s farm industry has come from China.

Back in March, China slapped a 100 per cent duty on canola oil, canola meal and peas, as well as a 25 per cent levy on select pork, fish and seafood products. That has caused a significant headache for agricultural producers in Manitoba and Saskatchewan who find themselves at the mercy of a country with deep pockets and a bruised ego.

Carney and his Liberal government have barely paid any lip service to the ongoing economic threat to Canada’s agricultural industry posed by Beijing. And from our vantage point, it seems that regional politics are likely at play in the Carney government’s foot dragging.

Beijing’s move was overwhelmingly viewed as retaliation for Ottawa’s decision to imposed a 100 per cent tariff on Chinese electric vehicles and a 25 per cent tariff on its steel and aluminum — a decision made by the Trudeau government in lock step with the former Biden administration in the U.S. While Trump has since revoked the U.S. EV mandate, Canada’s levy remains intact.

Canada’s Parliamentary Budget Office reported earlier this year that at least $52.4 billion in government funds and $46.1 billion in private capital have ben invested in Canada’s EV supply chain. Yet General Motors announced significant workforce layoffs in Ontario last April, and a temporary production halt to its electric commercial van, citing slow EV sales.

As the Financial Post reported in January, Canada’s EV tariffs on China generated controversy from the outset, with trade lawyers questioning whether the decision complied with World Trade Organization rules, and whether the move would hurt Canada’s future trade negotiations.

It’s worth recalling that, according to the Canola Council of Canada, China is the second-largest market for Canadian canola exports, with oil exports worth $20.6 million and meal exports at $918 million in 2024 alone.

“It’s ridiculous,” Forrest-area producer Ryan Boyd told the Sun last month. “The canola market is what drives agriculture here in Western Canada, and we’re sacrificing it to make a political point.”

The effect on the pork industry hits home here in Brandon and Neepawa too, as the 25 per cent tariffs make Canadian pork less competitive. Canada exports about $500 million worth of pork products to China every year, with about $130 million of that from Manitoba.

Certainly Canada has made some effort to shore up the agricultural sector over the last few months, specifically with financial improvements to the federal AgriStability program for 2025, including a 10 per cent increase to the compensation rate and a doubling of the payment cap to $6 million, among other changes.

And yes, federal and provincial efforts to break down interprovincial trade barriers will also help the agricultural sector. Case in point: the governments of Ontario and Manitoba recently signed a memorandum of understanding to boost economic collaboration and streamline the flow of agricultural goods between the two provinces. The agreement, inked in May, is a good step forward.

But a free and unencumbered market would be a far better answer.

We support the Carney government’s ongoing efforts to Trump-proof Canada’s economy and to meaningfully address the financial threat U.S. tariffs pose to our country. But political calculations by the federal Liberals to support a failing EV industry in Canada are unnecessarily hurting Western Canada’s agricultural sector.

And it needs to stop.