From metals to seafood: 5 N.L. industries bracing for impact of potential U.S. tariffs

Newfoundland and Labrador industries with strong ties to the U.S. are bracing for impact in the face of President Donald Trump's 25 per cent tariff threat, but some advocates are calling for a future where companies don't exclusively rely on a trading partner to the south.

On Saturday, the U.S. could impose tariffs on incoming Canadian goods. That has left some Newfoundland and Labrador industries worried.

Association of Seafood Producers executive director Jeff Loder said Newfoundland and Labrador's fishery is at stake under the threat of tariffs. About 90 per cent of snow crab harvested in the province is shipped to the U.S.

"We're very vulnerable," Loder told CBC News.

"Our industry has been developed around selling to the United States and there's a couple of scenarios here which are very hard even to think about."

Seafood, oil and gas, transportation, mining and technology do big business with the U.S.

Loder said the current situation is part of a broader systemic issue that needs to be addressed.

"We shouldn't be in this position. We should not be so reliant on one market. And I think this is an important moment for us to take a step back and really start to work on trade diversification," he said.

Loder says trade is becoming a weapon and he anticipates that other countries will also be willing to use tariffs to bolster their own economies.

"It is a vulnerability that we have and it's a vulnerability that we need to fix," he said.

Loder says different parties, from his association, the Department of Fisheries and Oceans, the ministers of fisheries and trade, as well as the Newfoundland and Labrador government and Fish, Food and Allied Workers union need to be sitting at a table to discuss next steps.

And while U.S. tariffs could come into effect on Feb. 1, Loder says they're already feeling the effects of the threat.

"The snow crab fishery is set to open in the middle of March. This is already impacting negotiations between ASP and the FFAW. It will be one of the first sectors that's directly impacted," he said.

Oil and Gas

Minister of Industry, Energy and Technology Andrew Parsons said the threat of tariffs will have a "massive" impact on the province.

"I don't think you can overstate the importance of it. I mean, about just over one third of our exports in this province go to the states," said Parsons.

"For us, it's a massive outflux, we'll say, of oil from this province. They need it there. In fact, they're refining it there in many cases."

The oil and gas industry accounts for 22.8 per cent of the provincial GDP.

"The reality is that the resource sector powers our province and the royalties and the revenue that we get from its oil," Parsons said.

But, he listed other sectors that are financially entwined with the U.S. They include mining, the fishery and lumber. He anticipates any tariffs on Canadian goods will hit Newfoundland and Labrador hard.

Energy N.L. spokesperson Ken Morrisey declined an interview request from CBC News. He said he's waiting for more information from the U.S. and Canadian governments.

"Energy N.L. is consulting with its members on this issue, along with participating in meetings with the provincial government on their approach to respond to any potential tariffs. Needless to say, Energy N.L. does have concerns," he wrote in an email.

CBC News attempted to reach multiple oil and gas companies for interviews, but they are staying silent.

Equinor spokesperson Erika Kelland said the Norwegian energy giant was keeping an eye on the situation. and ExxonMobil spokesperson Shelley Sullivan directed CBC News to send any inquiries to the Canadian Association of Petroleum Producers.

In a statement dated Jan. 13, Canadian Association of Petroleum Producers president and CEO Lisa Baiton said the U.S. and Canada business relationship is important, but Canada should start looking for other markets.

"Canada must also wake up to the reality that we need to diversify our global customer base, not just for energy but for all Canadian products, to build a more prosperous and resilient economy," she wrote.

Hit the road

Akita Equipment and Auto Transport owner Chris Howlett said the U.S. market is critical to his business and his trucks go all over North America.

"I would say 75 per cent of our business, right now in the summer, is hauling fish to the U.S. So that could be upwards of 30 loads a week that we would haul from here to any point in the U.S.," said Howlett.

Alex Driscoll, who works in dispatch, said the company transports oil and gas equipment to the U.S. as well as seafood to restaurants and distribution centres.

"Whatever it is that comes in by truck — food, groceries — we're moving it," said Driscoll. "A big piece of our business is supporting the United States."

Howlett said if tariffs are implemented on Newfoundland and Labrador goods, seafood harvesters would need to calculate if they could afford to sell to the U.S. market.

"I would assume that it would be a major slowdown starting off, for sure," said Howlett.

Driscoll says he believes there would be an immediate "hit" to businesses, rather than a gradual impact.

"If there's no buyers for the seafood product there because of the price — it's all price driven — then the impact would be, you know, almost immediate," said Driscoll.

Howlett said he's hoping Trump's tariff threats are "smoke and mirrors," but he said he's waiting to see what happens.

While tariffs are a possible threat to his company, Howlett said products like seafood will still be shipped somewhere, whether it's the U.S. or China, and Akita will pivot to serve that market.

"But it still affects our whole province if they can't trade with the U.S."

More support for mining

Mining Association of Newfoundland and Labrador CEO Amanda McCallum says prospectors, developers, operators and the mining service and supply sector will feel the impacts of tariffs differently.

Approximately half of Newfoundland and Labrador's nickel exports are destined for the U.S., she said, and 100 per cent of its aggregate material — which includes pebble, gravel and dolomite used in infrastructure development — goes south as well.

"There's certainly a big period of uncertainty right now and we do anticipate impacts," she said.

"It's the companies which export to these markets which are certainly bracing for the potential impacts of this."

McCallum says Newfoundland and Labrador has minerals, like antimony, graphite, manganese, that aren't readily available to the U.S.

Tariffs would have major negative implications on the province, she said, as mining is the second largest contributor to the province's GDP, at 7.3 per cent.

In response to the tariff threat, McCallum said she'd like to see more support for the mining sector, including investment into exploration. She said she'd also like to see the mineral exploration tax credit — a 15 per cent credit designed to help exploration companies raise equity funds — extended past its March expiration date.

Less competitive

TechNL CEO Florian Villaumé says local tech companies do big business with the U.S. and are waiting to see how the tariff threats play out.

He says the two countries are interconnected, as Newfoundland and Labrador tech companies not only sell services to clients in the U.S., they also buy materials from the U.S.

The Canadian government has put retaliatory tariffs on the table, but Villaumé says it's "early days" when it comes to how Canada should respond.

"Once again, it's still a threat and there are different tools to do it. Tech companies have been very proactive to identify [plans] if it happens. They've been working on this since November," he said.

Beyond diplomatic efforts between governments, he'd like to see the Canadian government develop a strategy to support impacted sectors.

If tariffs are implemented, Villaumé said products will become more expensive and hurt Newfoundland and Labrador tech companies.

"If there are more tariffs, it means that it's more expensive to provide a product or service, which means the pricing offered by those tech companies to their customers in [the] U.S. is going to increase, which likely makes them less competitive."

Lesson on diversification

There is a growing concern that concentrating on one major trading partner has put Newfoundland and Labrador in a difficult position if President Trump follows through on his tariff threat.

McCallum said there's a lesson to be learned here for the province's industries about relying too heavily on one trading partner.

"I think those are the big lessons learned in the takeaways that we need to look at — that adaptability from an industry perspective and diversification," she said.

"This is a prime reason to justify why we have to help Newfoundland and Labrador companies get additional markets and opportunities."

Parsons says U.S. markets are physically close, but there needs to be more effort put into finding and building relationships to other markets.

He says people across Canada are also becoming more aware of the importance of buying local and doing business within the country.

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