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Canadian tariffs take effect and economist says it could recreate North American trade flows

An ag economist says the latest escalation between the U.S. and Canada could permanently alter the trade relationship between the two countries.

Ian Sheldon with Ohio State University tells Brownfield, “I think this has really hurt those ongoing negotiations and potentially the future of the USMCA,” he says. “Even if both sides back off eventually, I think it’s undermining the trust at the negotiating table.”

Canada’s 15 to 50 percent retaliatory tariffs targeting U.S. dairy, agricultural equipment, and other industries went into effect on Tuesday.

Sheldon says dairy market access continues to be one of the key sticking points in trade negotiations.

“Canada has discriminated against the US in favor of the EU getting a slightly larger portion of the cheese import quota,” he says. “This is all part and parcel of this long-running debate.”

Sheldon says Canada has been exploring trade agreements with different countries, which could impact the future of U.S. agricultural trade. 

Canada is the second largest export market for U.S. agricultural goods.

AUDIO: Ian Sheldon, OSU