It has surely been a week of surprises. Remember just a few weeks ago we were all talking about the moratorium of understanding between Iran and the United States. That moratorium of understanding was supposed to last 60 days and I asked the question what happens after that?  Of course, it’s all a moot point now as all of us know missiles and bombs have been flying both ways in the vicinity of the Strait of Hormuz for several days.  It has sent energy prices up and along with it grain prices have followed.
 
     However, that might not have been the biggest surprise that came along last week.  From a Canadian perspective many of us were gobsmacked when the American administration announced new 50% tariffs on Canadian goods entering the US. These included alcohol, dairy products, hockey sticks, floriculture products, flower bulbs, lumber and animal products as well as several other things.  Many of the new measures took aim at items in spite of the CUSMA agreement using the Tarriff Act of 1930 to impose these tariffs.  For the most part, the reaction from Canada was disgust.  The American administration did this despite Canada being a bigger buyer of US products than the UK France, Japan and China combined.
 
     If you have read this column over the last 39 years you will have always known my opinion about our American friends when it comes to free trade. I documented the first free trade agreement that was signed with the Americans in 1989, NAFTA after that and of course the USMCA or CUSMA which was signed under the last Trump administration.  At the time the American President said that was the greatest trade deal ever but of course now it lies in tatters subject to annual reviews without the support of the Americans. In my view, since 1989 free trade is whatever, the Americans deem it to be.  With the fresh tariffs not only put on Canada but the rest of the world over the last few days that certainly is again the case.
 
      However, remember we must not be emotional about this. Simply put, this American administration has chosen a radically different trade policy for the United States versus past administrations. For countries like Canada, it’s incredibly tough not only because we are America’s biggest trading partner but also because of our shared history and culture. When the 50% tariffs were announced there was a 30-day grace period until they come in effect on August 19th, 2026. Needless to say, it has put renewed pressure on our federal government to stick handle some arrangement before that date. If we get to that date and nothing happens then of course, we’ll have to have a strategy for that as well.  It’s a pretty tough call especially when you’re dealing with an American administration that seems to change trade policy quickly and on a whim.
 
     I do not know what will happen. It has been very difficult to get any agreement with the new American administration. Threats to Canadian sovereignty haven’t helped either Canadian energy or Canadian potash were not tariffed. However, anytime dairy is mentioned eastern Canada tightens up a little bit. You know my view; I support supply management. Selling Canadian milk like I sell corn makes no sense.  There should be no backing down, not even one millimetre.
 
     It should not be lost on us that the American administration might be making radical changes to their trade policy, but they are still conducting a war surrounding the Strait of Hormuz.  That sent the price of oil almost up to $100 US yesterday.  Keep in mind, the roller coaster in grain prices has been attributed to missiles and bombs in Iran and the Middle East affecting the oil market.  As always, I am hoping for peace to break out but from where I’m sitting it certainly doesn’t look like it now. That should keep the American government busy for the near future.  It might also have an effect on how ultimately; they decide on their final trade policy decisions.
 
     That certainly creates all kinds of uncertainty and as we all know markets hate uncertainty.  In fact, you could argue that the grain fundamentals tell us there’s lots of grain out there but of course all this uncertainty is putting a premium in our grain market.  There is also widespread drought in Europe as well as a little bit of nervous dryness in the Midwest of the United States and Ontario. This crop is not in the bin yet and with all the uncertainty out there its value is certainly volatile.  Who knows, maybe it will ultimately take off some more.
 
      On my farm it is very dry and I’ll take lots of rain any day now. Otherwise, things are going to start moving backwards really fast.  We don’t want that. Needless to say, uncertainty seems to be growing not only in the weather but also in our markets and our trade policy. The challenge for Ontario and Quebec farmers will be
 
     The challenge for Ontario and Quebec farmers will be recognizing that this is bigger than one tariff or one administration. It is about whether Canada and the United States continue to believe that prosperity is built by trading with each other instead of trading against each other. I have watched this relationship for almost 40 years, and it has never been under this much strain. I still have faith that common sense will eventually prevail.
Trading Against Your Best Customer
 
 
 
       It has surely been a week of surprises. Remember just a few weeks ago we were all talking about the moratorium of understanding between Iran and the United States. That moratorium of understanding was supposed to last 60 days and I asked the question what happens after that?  Of course, it’s all a moot point now as all of us know missiles and bombs have been flying both ways in the vicinity of the Strait of Hormuz for several days.  It has sent energy prices up and along with it grain prices have followed.
 
     However, that might not have been the biggest surprise that came along last week.  From a Canadian perspective many of us were gobsmacked when the American administration announced new 50% tariffs on Canadian goods entering the US. These included alcohol, dairy products, hockey sticks, floriculture products, flower bulbs, lumber and animal products as well as several other things.  Many of the new measures took aim at items in spite of the CUSMA agreement using the Tarriff Act of 1930 to impose these tariffs.  For the most part, the reaction from Canada was disgust.  The American administration did this despite Canada being a bigger buyer of US products than the UK France, Japan and China combined.
 
     If you have read this column over the last 39 years you will have always known my opinion about our American friends when it comes to free trade. I documented the first free trade agreement that was signed with the Americans in 1989, NAFTA after that and of course the USMCA or CUSMA which was signed under the last Trump administration.  At the time the American President said that was the greatest trade deal ever but of course now it lies in tatters subject to annual reviews without the support of the Americans. In my view, since 1989 free trade is whatever, the Americans deem it to be.  With the fresh tariffs not only put on Canada but the rest of the world over the last few days that certainly is again the case.
 
      However, remember we must not be emotional about this. Simply put, this American administration has chosen a radically different trade policy for the United States versus past administrations. For countries like Canada, it’s incredibly tough not only because we are America’s biggest trading partner but also because of our shared history and culture. When the 50% tariffs were announced there was a 30-day grace period until they come in effect on August 19th, 2026. Needless to say, it has put renewed pressure on our federal government to stick handle some arrangement before that date. If we get to that date and nothing happens then of course, we’ll have to have a strategy for that as well.  It’s a pretty tough call especially when you’re dealing with an American administration that seems to change trade policy quickly and on a whim.
 
     I do not know what will happen. It has been very difficult to get any agreement with the new American administration. Threats to Canadian sovereignty haven’t helped either Canadian energy or Canadian potash were not tariffed. However, anytime dairy is mentioned eastern Canada tightens up a little bit. You know my view; I support supply management. Selling Canadian milk like I sell corn makes no sense.  There should be no backing down, not even one millimetre.
 
     It should not be lost on us that the American administration might be making radical changes to their trade policy, but they are still conducting a war surrounding the Strait of Hormuz.  That sent the price of oil almost up to $100 US yesterday.  Keep in mind, the roller coaster in grain prices has been attributed to missiles and bombs in Iran and the Middle East affecting the oil market.  As always, I am hoping for peace to break out but from where I’m sitting it certainly doesn’t look like it now. That should keep the American government busy for the near future.  It might also have an effect on how ultimately; they decide on their final trade policy decisions.
 
     That certainly creates all kinds of uncertainty and as we all know markets hate uncertainty.  In fact, you could argue that the grain fundamentals tell us there’s lots of grain out there but of course all this uncertainty is putting a premium in our grain market.  There is also widespread drought in Europe as well as a little bit of nervous dryness in the Midwest of the United States and Ontario. This crop is not in the bin yet and with all the uncertainty out there its value is certainly volatile.  Who knows, maybe it will ultimately take off some more.
 
      On my farm it is very dry and I’ll take lots of rain any day now. Otherwise, things are going to start moving backwards really fast.  We don’t want that. Needless to say, uncertainty seems to be growing not only in the weather but also in our markets and our trade policy. The challenge for Ontario and Quebec farmers will be
 
     The challenge for Ontario and Quebec farmers will be recognizing that this is bigger than one tariff or one administration. It is about whether Canada and the United States continue to believe that prosperity is built by trading with each other instead of trading against each other. I have watched this relationship for almost 40 years, and it has never been under this much strain. I still have faith that common sense will eventually prevail.