They also caution that tariffs could last a relatively long time, once they have been established.
United States President Donald Trump has imposed 25 per cent tariffs on steel and aluminum from anywhere, 25 per cent on Canadian dairy and poultry products, 10 per cent on Chinese products and various tariffs on European Union member countries’ products, including 200 per cent on French wines.
Canada and Europe have retaliated and have plans to add more U.S. products to their new tariffs list. China has imposed new tariffs on U.S. pork and grains.
Al Mussel, Ted Bilyea and Douglas Hedley took a look into the Canadian bakery and cereal industries which export substantial volumes to the U.S.
They advise companies to take a close look at the products they export because some have quality that build consumer loyalty and sales may continue, even with the 25 per cent U.S. tax applied. Others are price-sensitive items facing stiff competition and the tax could reduce sales.
Those who supply these exporting companies are likely to face pressure to reduce costs and that includes workers, they wrote in a paper published buy Agri-Food Economic Systems.
There might also be new export opportunities in countries hit by the tariff turmoil, such as the European Union and England. As they apply retaliatory tariffs on U.S. products, there may be opportunities for Canadian suppliers to jump into the gap.
This also applies on the import side as Canada retaliates to U.S. tariffs with its own new tariffs, opening opportunities for other countries to tap into the Canadian market.
“These U.S. trade issues were complicated and intensified by tariffs of 100 percent on Canadian canola oil, canola meal, and peas, and 25 percent tariffs on Canadian pork announced by China on March 7th,” they wrote.
They said the bakery, cereals, and pasta category is by far the
largest at almost $US 6.4 billion ($9.2 billion Cdn) followed by beef; chocolate and cocoa products; fresh and processed vegetables; soup and food preparations; pork; cut flowers and nursery; dairy products;
and processed fruit.
They dived into the bakery export statistics to show that the United Kingdom and the European Union, which already buy some products from Canada, are much heavier importers of products from the United States that they may hit with retaliatory tariffs.
