U.S. tariff of 25% would devastate P.E.I. potato industry, say producers
Some still believe incoming president Donald Trump won’t deliver on his threat
Some Islanders involved in the agriculture industry are concerned about U.S. president-elect Donald Trump's proposed 25 per cent tariff on all Canadian exports to his country.
P.E.I. potato producers say it would hurt their business — but it would also mean many Americans would pay more for their spuds and French fries.
"I think it could be pretty devastating for P.E.I. producers," said Randy Visser, who runs G. Visser and Sons. He sends about three-quarters of the potatoes his company grows to customers south of the border.
"It's extremely important. I mean, without the U.S. business, you know, we would be down to Canada" when it comes to potential markets, Visser said.
Earlier this week, Trump said he would act on his Jan. 20 inauguration day to impose 25 per cent tariffs on goods from both Canada and Mexico unless those countries take action to curb the flow of migrants and drugs like fentanyl crossing their borders into the U.S.
Last year, almost 80 per cent of international exports from P.E.I. were shipped to the U.S., representing $1.8 billion in trade. The top two exported products were frozen potato products and fresh potatoes.
"It's almost impossible to operate as a business properly with that kind of tariff," Visser said of Trump's plan. "Something would have to change, but any kind of tariff would ultimately result in less revenue back to the farm and back to the growers."
Many in the potato industry aren't surprised that talk on tariffs has ramped up, considering it was a hot talking point on Trump's campaign trail as he courted voters worried about job losses due to cheaper imported goods, said Greg Donald, general manager of the P.E.I. Potato Board.
"The U.S. is our top export market, so anything that could impact that is obviously a concern to potato farmers and our packers and our processors," Donald said.
A 25 per cent tariff would be another blow to the industry in the wake of the 2021 potato wart losses, he said. Late that year, the Canadian Food Inspection Agency halted shipments of Island spuds to the U.S. after the presence of wart was detected in two P.E.I. potato fields. The fungus makes potatoes ugly and reduces yields, but is not harmful to humans.
"The impacts of that were actually felt on… both sides of the border," Donald said.
The potato industry in Canada and the U.S. are so intertwined that Trump's threatened tariff would hurt players in both nations, he said. That gives him some hope that lobbying in the States could bring a reprieve.
"There are processed and fresh products that go back and forth," he said.
Outside the potato sector on the Island, there is doubt about whether Trump will actually put the 25 per cent tariff in place.
"It strikes me as rhetoric," said Donald Killorn, executive director of the P.E.I. Federation of Agriculture. "The incoming president is invigorating his base…, discussing his agenda and generally trying to stay in the news while he prepares to take office. I think we'll have to see it to believe it."
Tarifs would hit American wallets
Killorn believes average Americans should be worried about what Trump's tariff would do to their food costs.
"An initial estimate sees it raising household expenses by $2,500 a year," he said.
However, Killorn isn't hitting the panic button. Trump's first administration negotiated the latest version of the free trade agreement among Canada, the U.S. and Mexico, he pointed out.
"I think it's not necessarily something people on Prince Edward Island should be terribly worried about at this point," he said. "I think the biggest risk is if we end up in a trade war and our goods become more expensive."
P.E.I. Premier Dennis King is expected to join a meeting with Prime Minister Justin Trudeau and Canadian premiers Wednesday night to discuss how to approach the Canada-U.S. trade relationship.
Killorn hopes King is given a balanced and honest update from Trudeau and his colleagues on the plan to negotiate with the U.S. on trade issues like this.
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With files from Laura Meader