CALGARY — After the recent unsuccessful trade negotiations with the Americans, many Canadians have posited placing tariffs on potash — but this may not be the best idea for Canada. This is according to The Food Professor, or Dr. Sylvain Charlebois, an agri-food professor who operates an agri-food lab out of Dalhousie University, who told the Western Standard that long-term, Canada would be just as badly off as the US by this hypothetical tax.Eventually, said Charlebois, Americans could "buy from Russia, Belarus or Israel, while we cannot quickly redirect 53% of [potash] exports overseas."The idea of putting a tax on potash, an American agricultural essential import, would be in reaction to the unsuccessful trade deal that consequentially led to the US placing 50% tariffs on 5% of Canada's annual exports to the US, including $28 billion in goods like agriculture products on Saturday. .How would Canada be equally worse-off by a potash tariff on the Americans?Charlebois says that Canada does have an advantage when it comes to supplying Americans with potash."Canadian potash is by far the most economical and reliable source for American farmers," Charlebois told the Western Standard.He adds that according to the most recent USGS data, the US imports 92% of the potash it consumes, while 79% of that potash that is supplied by Canada.If Canada were to tax potash, the US would potentially replace its source which would "generally mean longer delivery times, additional port handling and higher transportation costs.".As a result, American farmers would be hurt, "—and eventually food consumers—would likely pay more."But Canada would not be absent from the economic consequences.Sure, the US would have a hard time replacing Canadian potash supply, but Canada would also find it difficult to gain new customers."Canadian producers could not instantly redirect all US-bound volumes elsewhere either," stated Charlebois."Canada already sells extensively to Brazil, China, India and other markets, but those customers have contracts, bargaining power and established suppliers.".More than that, transport wouldn't be so straightforward as crossing the border. "Additional volumes would also have to move through railways and ports rather than directly across the border."Charlebois explains it's not who would suffer more from the tariff — but that both would suffer, neither gaining the beneficial upper hand."Americans would face higher fertilizer costs, while Canada could lose sales, royalties and investment.".Instead of this undesirable outcome for both countries, Charlebois says Canada should be using its leverage to "reach an agreement—not simply to inflict economic damage.""Tariffs on imports are ultimately taxes paid by Canadian importers, businesses and consumers.""Ottawa should avoid targeting food, fertilizer, agricultural inputs, medicines and manufacturing components, especially when Canada lacks an immediate domestic substitute.".So what should the feds be doing instead to get a better trade deal for Canadians?Well, Charlebois says if retaliatory tariffs end up being necessary — blanket "dollar for dollar" is not always the most effective.Instead, he recommends "temporary, highly targeted and concentrated on non-essential finished products for which Canadian or non-U.S. alternatives already exist.""Canada should also rely on CUSMA and WTO challenges, negotiations, strategic procurement policies, support for affected exporters and accelerated trade diversification."
