Trump and Trudeau were scheduled to speak twice on Feb. 3 and it’s unclear whether Americantariffs will be paused
Before American president Donald Trump made good on his promise last Saturday to impose a 25 per cent tariff (a tax) on all Canadian goods sent to the U.S., people in the manufacturing, farming and fishing sectors in the Interlake weighed in on how tariffs could possibly impact them and how they’re responding.
Diemo Machine Works north of Arborg is a privately owned and operated custom machining and fabricating manufacturer that works with various types of materials (e.g., carbon steel, stainless steel and aluminum), and provides products to industries such as oil and gas, transportation, agriculture, mining and construction across North and South America.
Allan Friesen, Diemo’s director of strategic initiatives and procurement, said tariffs will likely hurt the company, but they’re expecting them to cause a minimal amount of pain. It’s Canada’s counter-tariffs they’re worried about.
“The tariffs from the U.S. would hurt us, but they wouldn’t be that big of a deal,” said Friesen last Thursday. “What we’re concerned about are counter-tariffs from our side. If the Canadian government does not put tariffs on, we’d be fine. The reason manufacturers are concerned about counter-tariffs has to do with the difference between the Canadian and U.S. dollars. Our dollar compared to the U.S. is currently at $1.44 or thereabouts. With that exchange rate, we have such an advantage over American competitors that we could still be fine with the [American] tariff. Putting our own tariff on could kill Canadian businesses.”
Diemo sends about 70-80 per cent of its products to the U.S., said Friesen, and the company is almost 100 per cent dependent on the U.S. market.
Lobbying the government to refrain from put counter-tariffs on American goods is one thing manufacturers could do and they can also look for alternative markets, he said.
Diemo is currently looking at other market options.
“We will be looking for Canadian customers and new markets. We are certainly exploring our options and opportunities in Canada, and we’re working with some potential opportunities right now,” said Friesen.
Grain farmer Gordon Klym, who farms in the Ledwyn area in the Municipality of Bifrost-Riverton, said the threatened tariffs will affect the agriculture industry in the Interlake.
“We still don’t know what the tariffs will be or what products they’ll be applied to,” said Klym, the day before Trump signed the tariff order, “but I do know they’ll affect us; there will be a financial impact on ag producers.”
A lot of beans, for instance, are exported to the U.S. and producers in the Interlake have increased bean acreage over the last number of years, he said.
“There will likely be quite an impact on their bottom line because the elevators we sell to will not be shouldering the losses from a possible 25 per cent tariff. Elevators can’t afford to do that,” said Klym. “It will end up coming back on us farmers.”
But farmers also “can’t afford” to take on extra costs associated with tariffs, and they’ll be faced with some difficult choices.
“Farmers are always at the bottom of the list; everybody takes their cut and whatever is left over is what the farmer gets,” said Klym. “Farmers will be faced with a choice: they can either quit growing those products or sell at a loss.”
Canadian ag producers could also look at markets other than the U.S., he said, despite the U.S. being a “big market” for them. Canada already ships agricultural products overseas to Europe, Asia and elsewhere, but overseas shipping come with extra transportation costs whereas shipping to America doesn’t.
As to how he’s coping with Trump’s tariff threat, Klym said he’s been in the farming business for far too many years to get anxious about times of uncertainty.
Lake Winnipeg commercial fisher and analyst Bill Buckels said the pain delivered from tariffs on the Manitoba fishing industry could be relative when considering “normal cycles” of economic uncertainty in the industry.
“In the fishing business, we’ve always had bad seasons just like in the farming business,” said Buckels last Friday. “This will not be the end of world for us, and fishers shouldn’t be unduly worried about tariffs.”
The commercial winter fishing season is just about over and there’s a “tremendous” shortage of fish in the supply chain. That means there’s going to be considerable demand from America for walleye (pickerel), which is a vertical market in the U.S., he said. If the price of food goes up as a result of Trump’s tariffs, Manitoba fish going to northern U.S. States (which buy the most fish from Manitoba) will see a price increase, along with other meat products such as chicken, beef and pork.
“But I’m expecting a negligible impact on the fish market. After discussing possible tariffs with all the major fish companies in Manitoba, my analysis is such that there will be a negligible impact on us because we’re not shipping an unfinished product like an agricultural commodity. People selling pigs to the U.S. are going to feel this because that’s an unfinished product. We in the fishing business aren’t selling round fish to the United States in any great degree. We are selling boxes of fillets and we’ve already employed people to process it here in Canada,” he said. “Any additional costs from the tariffs will be passed on to our American buyers, but Americans prefer our wild-caught freshwater fish over some of the garbage fish that comes from overseas.”
Manitoba still has international fish markets and the industry can further diversify should the bottom fall out in America, said Buckels. Fish buyers in Manitoba have been planning for the Trump tariff since January because they knew it was coming, and some have even issued a price increase because they’re short of fish for the American market. In spring, it might be a different story. But at the moment, the industry has an opportunity to approach its trading partners in Europe to see if it can promote increased sales or find new markets altogether.
“We have international buyers that will help us absorb any potential shocks from the tariff. That said, we still have to increase our market going forward like any other Canadian business and diversify,” said Buckels. “There are some manufacturers in the Interlake, for instance, that have done just that a long time ago; they’ve established an international market for their products and don’t wholly rely on the U.S. The fishing industry needs to do the same. We have time to diversify. I’m feeling optimistic because we’re not in the same boat as the wider manufacturing sector.”
Donald Trump had promised via social media in November 2024 that he would sign an executive order on his first day in office (Jan. 20) that would impose tariffs on all Canadian imports. He didn’t. He then set the tariff date ahead for Feb. 1.
He signed an executive order on Feb. 1 titled “Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border.” It imposes a 25 per cent tariff on all Canadian products sent to the U.S. and a 10 per cent tariff on Canadian energy. Those tariffs take effect Tuesday, Feb. 4.
Since Trump threatened Canada with tariffs, analysts have been speculating about his motives. Some contend that because America has one of the highest debts of any country in the world, Trump needs the revenue from tariffs to service it. Others say tariffs could destabilize the Canadian economy and encourage investors to turn to the U.S. Tariffs could also be a means to compel Canada to become America’s 51st state, which would give Trump control of Canada’s rich mineral resources, oil and gas reserves and other resources. Trump has said many times over the past few months that Canada should be part of the U.S., and even gave a shout-out during his inauguration speech to manifest destiny, the 19th-century American version of European imperialism.
Trump himself has said his tariffs are warranted to get Canada and Mexico to crack down on migrants and fentanyl crossing their respective borders into America.
The Canadian government said Canada is responsible for less than one per cent of the fentanyl smuggling and illegal crossings to the U.S.
Prime minister Justin Trudeau’s responded on Feb. 1 to the Trump-initiated tariff war. His public address included themes of betrayal and loss, law-breaking (i.e., Trump violating the Canada-US-Mexico trade agreement), Canadian unity in the face of attack and determination to withstand “rough” economic times ahead.
“We were always there standing with you, grieving with you, the American people,” said Trudeau, with reference to the wars Canada and America fought side-by-side and natural disasters that befell America in the past. “Together, we’ve built the most successful economic, military and security partnership the world has ever seen, a relationship that has been the envy of the world. We’ve had differences in the past, but we’ve always found a way to get past them.”
A $155 billion Canadian tariff package was then announced in response to the “unjustified” American tariffs.
In a news release issued Feb. 1, minister of finance Dominic LeBlanc and foreign affairs minister Melanie Joly confirmed Canada is moving forward with 25 per cent tariffs on $155 billion worth of American goods.
“Less than 1 per cent of the fentanyl and illegal crossings into the United States come from Canada,” they said in the news release. “We will not stand idly by when our nation is being needlessly and unfairly targeted. The government will defend Canadian interests and jobs. We stand ready to support affected workers and businesses.”
The first phase of Canada’s response includes tariffs on $30 billion of goods imported from the U.S., starting on Feb. 4. The products include orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper.
The second phase will impose tariffs on an “additional” list of imported goods that will be made available for a 21-day public comment period. Those products include passenger vehicles, trucks, buses, electric vehicles, recreational vehicles, recreational boats, aerospace products, steel and aluminum products, certain fruits and vegetables and beef, pork and dairy.
The federal finance department has alist of products on its website. Additional non-tariff options such as procurement of American products/services could follow should the U.S. persist with its tariffs.
Various premiers and the prime minister are encouraging Canadians to be selective in their purchases and “buy Canadian” products where they can, or find alternative products from Europe, Asia or other regions. Buying Canadian products will help support the country’s economy during the trade war.
Trudeau spoke with Mexican prime minister Claudia Sheinbaum after Trump’s executive order and the two leaders agreed to work together in areas of common interest and to “enhance the strong bilateral relations between Canada and Mexico.”
A 25 per cent tariff is estimated to cost the average Canadian about $1,900, according to the Canadian Chamber of Commerce.
The federal government had announced on Jan. 28, before Trump’s tariff order, that it was preparing a “stimulus package” to help businesses cope with the tariffs.
