The United States and China bought $4.86 billion of Manitoba agri-food exports in 2025; more than half of the province’s total. These tariffs affect millions of dollars of Manitoba agricultural products with producers already experiencing the effects of tariffs through lower commodity prices, lost sales, and higher input costs.
KAP continues to work with agricultural groups across Canada and with all levels of government to advocate on the tariff issue.
Our news release from March 4, 2025, highlighted the tariff issue.
FAQ
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KAP strongly opposes the tariffs applied by the United States and China. No one benefits from the current tariff situation. A rules-based trading system benefits agriculture, and international trade has made Canada one of the world’s leading agri-food exporters. Growth and productivity in Manitoba agriculture depend on international trade. KAP will continue to push for a rules-based trading system, market development and tariff removal.
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Trade has been a high priority for KAP. Manitoba farmers rely heavily on international markets when selling their commodities. Given this dependence, KAP has had numerous meetings with elected officials and government staff, highlighting the need for an effective response with a quick resolution. We have also met with industry and producer groups to further understand their concerns. KAP sent both farmers’ concerns and recommendations to the provincial and federal governments. In April 2025, Premier Kinew said, “We thought long and hard on it, about it, and we’re going to do every single thing that KAP has brought forward.” Our organization will continue to collaborate with government while working towards solutions.
Below are some of the recommendations sent to government.
- Expedite permitting processes across all departments to facilitate the expansion of value-added production and processing (e.g., hog barn expansions, building permits, grain drying applications, motor carrier permits).
- Request the Government of Canada allocate additional CFIA inspection resources for both processed products and live animals crossing the Canada / U.S. border.
- Continue lobbying efforts in Washington, D.C., and other important U.S. states that buy significant amounts of Manitoba agricultural products. This should be done in collaboration with other provinces, such as Alberta and Saskatchewan, and affected members of Manitoba’s agriculture value chains.
- Continue to work with other prairie provinces to leverage shared interests and resources, as well as remove internal trade barriers, especially for value-added food products.
- Survey current infrastructure requirements and make appropriate expansions for both internal and export trade (e.g., facilitating expansion of agriculture and food trade to the European Union and the United Kingdom).
- Provide additional investments in local markets and align policies to increase demand and expand value-added capacity (e.g., biofuels, hog processing, abattoirs).
- Prioritize the Provincial Nominee Program to ensure adequate labor for the agricultural sector.
- Work with the federal government to decide how funds from retaliatory tariffs should be appropriately distributed to each sector.
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The reasons have changed over time. In early 2025, the U.S. imposed tariffs on Canadian goods under the International Emergency Economic Powers Act (IEEPA), citing border security and illegal drugs. The U.S. Supreme Court struck down the IEEPA tariffs in February 2026. Section 232 tariffs on steel, aluminum, autos, copper, lumber and other sectors remain in effect.
- Current U.S. tariffs rest on three other laws:
- Section 232 covers national security tariffs by sector.
- Section 338 covers the 50 percent tariffs and import bans. The U.S. says these respond to Canada’s treatment of U.S. dairy, alcohol and motor vehicles.
- Section 301 covers a forced labour tariff. The forced labour tariff of 10 or 12.5 percent took effect July 24, 2026, on imports from 60 economies including Canada. CUSMA-compliant Canadian goods are exempt.
- China’s tariffs respond to Canada’s 2024 tariffs on Chinese electric vehicles, steel and aluminum.
- Current U.S. tariffs rest on three other laws:
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A tariff is a tax on imported goods, and the importer pays it. Importers often pass the cost to the next buyer, so consumers pay higher prices. Exporters also bear the cost through lower prices and lost sales. Governments sometimes use tariffs to protect domestic industries from foreign competition or from dumping (foreign goods sold below fair value). Because tariffs apply broadly, they also hit producers who had no part in the underlying dispute.
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American and Chinese buyers play an essential role for Manitoba producers. In 2025, the two countries bought $4.86 billion of Manitoba agri-food exports, 54 percent of the provincial total. The United States is by far the largest market at $3.84 billion. China ranked third at $1.01 billion, behind Japan, while its tariffs on canola products were in place. In 2024, China was second at $1.43 billion. Top exports to the United States include canola oil, frozen potato products, pork, live hogs and cattle, and canola meal. Top exports to China include soybeans, canola seed, wheat and pork. Trade also runs the other way. In 2025, the United States supplied 93 percent of Manitoba’s animal feed preparation imports and more than half of its monoammonium phosphate (11-52-0) imports.
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Most goods that comply with the Canada-United States-Mexico Agreement (CUSMA) still enter the U.S. without additional tariffs. The main exception is a set of 50 percent tariffs that the United States imposed under Section 338 of the Tariff Act of 1930. These took effect August 22, 2026, and they apply whether or not a product qualifies under CUSMA. They don’t apply to energy, potash, and goods already under Section 232 tariffs.
- Starting September 29, 2026, certain Canadian dairy products will be banned from entering the U.S. entirely.
- Coverage is set by tariff code, so producers and exporters should confirm their products with their buyer or customs broker.
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- On March 1, 2026, China suspended its 100 percent tariffs on Canadian canola meal and peas and its 25 percent tariffs on lobster and crab, till the end of 2026.
- Canola seed now faces a combined 14.9 percent tariff (a 5.9 percent duty plus China’s standard 9 per cent rate), in place for five years. China’s 100 percent tariff on canola oil and its 25 percent tariffs on pork and seafood remain in place. Since July 1, 2026, importers of Canadian pea starch have had to post a 73.5 percent provisional anti-dumping deposit. China has extended that investigation to February 12, 2027.
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Canada imposed counter tariffs of 15, 25 and 50 percent on about $27.6 billion of U.S. goods. The list covers 629 tariff codes, including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. These add to Canada’s existing counter-tariffs on U.S. steel, aluminum and autos.
- For producers, the main effect is on input costs, especially machinery, parts and steel products.
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No. Under Article 32.2, nothing in CUSMA prevents a country from applying measures it considers necessary to protect its own essential security interests. The U.S. has relied on national security to justify its Section 232 tariffs. The Section 338 tariffs apply regardless of CUSMA origin.
- CUSMA’s first joint review took place July 1, 2026, and the U.S. did not agree to extend it for another 16 years. CUSMA stays in force until 2036, but the countries must now review it every year unless they agree to an extension.
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Canada has 15 free trade agreements in force, covering 51 countries. Agreements with Indonesia and Ecuador have been signed but are not yet in force. Each agreement is different, and each partner has different demand for Canadian agricultural products. In 2025, Manitoba exported $1.12 billion in agri-food products to Japan and $219 million to South Korea, both free trade partners. New agreements take years to bring into force. Canada and Ecuador concluded negotiations in January 2025 and signed in July 2026, and the agreement still needs ratification.
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- AgriStability: For 2025, ministers raised the compensation rate from 80 to 90 percent and doubled the payment cap from $3 million to $6 million. For the 2026 program year, Canada and Manitoba raised the maximum interim payment from 50 to 75 percent of the estimated final payment. Manitoba farmers who missed the 2026 deadline can still apply until June 30, 2027, with a 20 percent late participation penalty.
- Advance Payments Program: For 2025, the federal government pays the interest on the first $250,000 of advances. From September 2025 through 2026, canola producers have a $500,000 interest-free limit.
- AgriInvest: Producers can deposit up to 100 percent of their Allowable Net Sales (ANS) each year, and governments match deposits on the first 1 percent of ANS. ANS is capped at $1 million, so the maximum government match is $10,000 a year. Producers can withdraw funds at any time, which makes the account a buffer against tariff-related income drops.
- Market diversification: The federal government committed $75 million over five years, starting in 2026-27, to help industries affected by trade barriers find new markets.
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This remains unknown. Trade negotiations, court rulings and further retaliation all affect how long tariffs last. The Section 338 tariffs have no set end date, and China’s suspension on canola meal and peas expires December 31, 2026, unless renewed. The longer a tariff stays in place, the more likely it becomes permanent. For example, the U.S. “chicken tax,” a 25 percent tariff on imported light trucks, was imposed in 1964 through Proclamation 3564 in response to European tariffs on U.S. chicken. It remains in effect today.