P.E.I. industry leaders welcome tariff pause, remain cautious about uncertainty ahead
'It’s a very stressful time for many exporting businesses in Canada and for important businesses in the USA'
A 30-day pause on U.S. tariffs is good news for key industries in P.E.I. for now, but the temporary truce hasn't eased the anxiety of industry leaders on the Island, who say there's still much uncertainty ahead.
Prime Minister Justin Trudeau said Monday afternoon that U.S. President Donald Trump will hold off levying 25 per cent tariffs on Canadian goods for at least 30 days after Ottawa made a series of commitments to improve security along the border.
P.E.I. Premier Dennis King said in a statement Tuesday that the pause creates space for further discussions to find a resolution that protects jobs, businesses and industries on the Island and across Canada. The province has temporarily halted its plan to remove U.S. products from provincial liquor store shelves.
Bob Creed, executive director of the P.E.I. Seafood Processors Association, said industry leaders were relieved to hear about the pause.
"We were pleased to hear at the last minute that there was an agreement reached to continue the discussions before the implementation of any tariff model," said Creed told CBC's Island Morning.
'So much uncertainly'
The P.E.I. Potato Board also welcomed the reprieve but says confidence in the trading relationship for the future needs to be restored.
Greg Donald, the board's general manager, said more than half of P.E.I.'s annual 2.5 billion pounds of potatoes — both bagged and processed — are exported to the U.S. The industry has an economic impact of $1.35 billion and directly or indirectly employs over 8 per cent of the Island workforce.
The potential fallout could be severe, Donald said, with some businesses at risk of shutting down if the tariffs make operations unsustainable. Finding alternative markets to replace the lost U.S. demand would be a major challenge.
"There's so much uncertainty around this," he said.
For the seafood industry, Creed said the next four weeks will be challenging, as it's difficult to predict what will happen.
"It's a very stressful time for many exporting businesses in Canada and and I suspect for importing businesses in the USA," Creed said.
Seafood industry relies on U.S. exports
In 2023, the province exported approximately $324 million worth of seafood products south of the border, Creed said. P.E.I.'s seafood industry has long relied on the U.S. market as its primary export destination.
"It's been decades building that relationship. Certainly it's taken a hit here the last number of weeks," he said.
Charlie McGeoghegan, chair of the Lobster Fishers of P.E.I. Marketing Board, said the U.S. accounts for about 60 per cent of the province's lobster market and processors also rely on business from fishers in Maine who send their catch north of the border before bringing it back to the U.S. to be sold.
"So they need us and we need them," he said.
McGeoghegan said it's clear that diversifying the market is more important now than it's ever been.
"We've been working on diversifying markets over the last five years at the marketing board, and part of the struggle was getting processors and buyers to buy into that, to try new markets and to deal with somebody new that they haven't dealt with for 20 years," he said.
"So hopefully now that we have some groundwork in place, that they will be more receptive to that. We've been working in Dubai and Kuwait and Singapore, and more in China, and Barcelona, so we have some networks set up there now we just need to be able to sell the product."
While the Island's lucrative lobster fishery is currently in its off-season, Creed noted that P.E.I. seafood processors continue to export a variety of products year-round, including mussels where the province is a recognized leader. A tariff-induced spike in prices could have a devastating impact on demand.
Maintaining a welcoming image
P.E.I.'s tourism sector has also been bracing for potential fallout from tensions between Canada and the U.S.
Corryn Clemence, CEO of the Tourism Industry Association of P.E.I., said American visitors have long been a major part of the Island's tourism industry. In 2023, they accounted for a record number of tourists, and the tariffs could have ripple effects.
"What we heard from a lot of our members was the idea that Americans wouldn't feel welcome here."
That's why it's crucial in the coming months to strengthen P.E.I.'s reputation as a hospitable destination.
"Islanders have always been known for our friendly, welcoming demeanour, and I think that's really important that we maintain that throughout any discord that we may go through."
If tariffs are implemented in March, Clemence noted there could be one silver lining: a weaker Canadian dollar, which could make P.E.I. a more affordable destination for American travellers.
"It's not an ideal situation, of course, but it could create opportunity for us."
With files from Island Morning, Wayne Thibodeau and Maggie Brown