Opinion: Trump 2.0 brings ramifications for Canada’s agri-food sector

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Canadian farmers now face a more challenging landscape than they did during the first Donald Trump presidency in the United States.

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As Canadians recall the shock of Donald Trump’s first presidential victory, it appears that history may be poised to repeat itself. Trump’s return to the White House — whether welcomed or not — will undeniably be a pivotal moment.

Yet, this time, Canadians might approach the prospect with more reservation, reflecting on the changes his first term brought to our shared economy and agri-food trade.

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During Trump’s first administration, Canada performed reasonably well economically, even amid intense political rhetoric and policy shifts. Our GDP per capita grew by 6.3 per cent, a figure far more robust than the stagnant growth we’re seeing today.

The agri-food trade between Canada and the U.S. also flourished, growing by almost 20 per cent from 2016 to 2020. Despite the “America First” focus, our food sector benefited from stronger cross-border trade — a trend that may continue, though with potentially higher stakes.

However, Canadian farmers now face a more challenging landscape. Trump’s campaign pledges include reducing costs for American farmers, aiming to boost competitiveness, while Canadian agricultural costs have risen steadily.

Since 2019, Canada’s wholesale food prices have increased almost 40 per cent more than in the U.S., putting Canadian producers at a disadvantage and complicating their ability to compete. A second Trump administration could widen this gap further, intensifying the pressures on our agricultural sector.

Environmental policies could also become a significant source of tension. Under his first term, Trump rolled back more than 100 environmental regulations, many of which were reinstated by President Biden. If Trump resumes office, Canada’s carbon tax — already controversial — may strain cross-border trade dynamics.

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Since 2019, Canada’s carbon tax has grown from $20 per tonne to a projected $95 per tonne by 2025, drastically increasing the cost burden on Canadian agriculture.

Trump’s less restrictive environmental stance could give American farmers a cost advantage, leaving Canadian agriculture facing higher operational expenses.

Additionally, Trump is likely to support an updated almost $2-trillion Farm Bill, bolstering U.S. crop insurance, subsidies and agri-food research to counter China’s global influence. With China tensions simmering, Canada may have to navigate this increasingly competitive and politically fraught landscape carefully.

The likelihood of higher ethanol production and a continued hard line on Chinese tariffs, policies that the Biden administration largely upheld, underscores that Canada’s alignment with U.S. agricultural strategies will be critical to avoid potential trade disruptions.

In global trade, the stakes are equally high. The BRICS nations (Brazil, Russia, India, China and South Africa) are strengthening their alliances to counterbalance Western influence, and a more isolationist U.S. approach under Trump could force Canada to choose its alliances carefully.

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This strategic recalibration won’t be easy, as Canada’s role as a middle power may come under strain in a world more polarized between competing economic blocs.

On North American trade, Canada must confront a transactional approach from a Trump-led U.S., one that may bring both predictability and hard-nosed negotiations. Trump’s proposed renegotiation of the North American trade agreement could mean that sensitive areas like dairy will return to the bargaining table.

Bill C-282, which would protect Canada’s supply management systems from future trade deal concessions, might be an early casualty. If enacted, Canada could face immediate pressure from the U.S. to scrap the legislation, complicating efforts to safeguard our agri-food sector’s unique protections.

Canada’s agri-food industry stands at a crossroads, where costs, environmental policy, and geopolitical pressures intersect. While Trump’s return might yield certain economic benefits, it would also challenge Canada’s trade policies, cost structures and environmental standards.

Canada’s agri-food stakeholders will need to prepare for complex adjustments with Trump’s second presidency.

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Sylvain Charlebois is the director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast.

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