Doug Ford’s trade tantrum proves costly for Canada’s economy

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United States and President Donald Trump is clearly disappointed with Canada conducting trade negotiations covering softwood lumber, auto parts, oil, aluminum and steel.

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Lee Ontario Anti-Tariff Advertising Campaign — financed by the Doug Ford government — is the direct reason Washington raised tariffs from 35% to 45% on imports not originating from Canada, the United States and Mexico. The agreement doesn't matter. Importantly, the escalation reflects a deteriorating diplomatic climate that will have very real consequences for Canadian agri-food exporters.

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Some analysts argue that an increase of 10 percentage points is not significant. It's not. The question is not simply what tariffs are charged and how much, but the tone of the relationship. Canada is increasingly perceived as an unstable and reactive country that negotiates based on emotion rather than strategy.

Prime Minister Doug Ford's message to 'stand up to America' – complete with nostalgic cameo by Ronald Reagan — may have been rooted in sincere conviction. Ford probably believes, like many Canadians, that speaking out for the country's interests with bold words is the right thing to do. But again, it doesn't matter. In diplomacy, tone often outweighs intent. What works well at home may seem challenging or even antagonistic abroad, and the consequences are already being felt across all industries.

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Over the past year, Ford went on a public tirade against foreign-owned companies such as Crown Royal parent Diageo (accusing them of abandoning Ontario) and Stellantis (for seeking federal and provincial support for its electric vehicle plant). These theatrics may score short-term political points, but they have long-term costs. They reinforce the impression that Canada is hostile to international investors at a time when cooperation, not confrontation, is needed most.

Such rhetoric increases uncertainty on both sides of the border. The results speak for themselves: higher tariffs, weaker investor confidence and a gradual shift away from Canadian suppliers by US partners. Tariffs or not, many Canadian food exporters are already losing American accounts—not because of trade rules, but because of erosion of trust and bad diplomacy.

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GOOD LUCK FOR CANADA'S REPUTATION

Ford's political campaigns and threats of lawsuits may be popular topics of conversation domestically, but they come at a cost to the country as a whole. Washington's response does not discriminate between provinces. They affect all exporters, including Canadian food producers who rely heavily on the US market.

Those who believe that the new rate of 45% will have little impact on trade are mistaken. Canadian food companies are already losing contracts with the US – not because of the tariffs themselves, but because Canada is now seen as a business risk. Some Canadian importers now face higher tariffs than competitors in Vietnam, Laos or even Myanmar. The problem is not in the tariff schedule, but in perception. And right now, the outlook for Canada's agri-food sector is poor.

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While many Canadians dismiss Trump as unpredictable and hawkish, the deeper question is what happened to Canada's once cohesive “Team Canada” approach to trade. The agri-food industry in particular depends on cross-border stability and predictability. Alienating our largest customer, with 34% of the global consumer market, is not a sustainable strategy.

There is no trade war. There are no sides. What we are seeing is an American recalibration of domestic fiscal policy with global implications. Canada must adapt to this new reality with prudence, not posturing.

The results to date offer one clear lesson: Canada needs a new approach, especially from Queen's Park.

— Charlebois is director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor podcast, and visiting scholar at McGill University.

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