Copy of AFF Sentinel V22 #02-January Promises Chaos
- Steve Dittmer
- Jul 22
- 4 min read
Several Things Will Need to Be Settled This Month
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 01/08/25
So, we know Donald Trump is scheduled to take office on January 20. The dockworkers union that controls the East and Gulf Coast ports had threatened a strike since their 62 percent raise wasn’t enough to satisfy them and they refused to allow automation at the ports. There is word Wednesday that an agreement has been reached but other parties have to agree and then it must be ratified by 45,000 union members. Then there is the threat of major tariffs levied on imports into the U.S. from Canada and Mexico. The word is that the Treasury will have to start juggling money this month as it begins bumping against the official debt ceiling in March. And the Republicans, proud owner of very slim majorities in both houses of Congress, have yet to decide how they will handle reconciliation bill or bills.
A Canadian contact of mine raised the beef question. Is Trump really going to impose a big tariff on Canadian cattle and beef exports in ten days’ time?
We are one of the industries most integrated with Canada, we would guess, among those dealing in perishable commodities. The auto industry ships parts and sub-assemblies back and forth across the border many times before a finished car is shipped back across the border. But that is not a perishable product.
We honestly thought something would be negotiated by now. But Canada’s leadership situation has complicated matters. Prime Minister Trudeau has announced his resignation as soon as the party has selected his successor and he dissolved Parliament until March 24. Among several Liberal party candidates for replacing him is rumored to be Chrystia Freeland, who negotiated for Canada in the replacement of NAFTA by the USMCA. Freeland resigned last fall as Finance Minister, citing Trudeau’s handling of the impending Administration of Trump on trade policy and a possible trade war.
In all the stories we’ve seen interviewing political science professors in Canada, the name of the minister for agriculture has not come up in analyzing what will happen next.
The experts agree Trudeau resigning will not affect Trump’s intentions. If the Liberal Party was to quickly select a new leader, perhaps Freeland whom Trump is somewhat familiar with, that might make a difference. The Conservative Party could force a no confidence vote and speed up Trudeau’s departure but we’ve not heard that’s in the offing. General federal elections are scheduled for October but opposition parties could force an earlier election.
Canada ships 75 percent of all its exports to the U.S.
Would Canada’s leadership situation induce Trump to delay imposing tariffs on Canada? Trudeau jumped on a plane and went to see Trump shortly after he made the tariff announcement. We’ve read that Trudeau promised moves to stem the flow of illegals and drugs but beyond saying the meeting was productive, we’ve not heard if Trudeau’s promises were enough. Steps reported included drones, helicopters and more police patrolling the border.
U.S. officials have said the number of border encounters approached 200,000 in 2024, seven times what it was in 2021.
Perhaps the best indication we’ve had is that several people we’ve contacted who might know something have been silent. That could mean something is going on but they can’t comment. Or, it could mean they don’t know anything either. This first day in the Oval Office thing is problematic because no one in the incoming Administration is official until then and so neither can any negotiations be official.
We ship billions of dollars’ worth cattle and beef back and forth with Canada every week. We don’t import much beef from Mexico but we do export lots of beef there.
Someone needs to remind Mr. Trump that there is a big difference between lumber and autos and perishable products like cattle and beef. The flow of oil and gas in pipelines falls somewhere in between. But we don’t need any gasoline price shocks now.
While we support the use of tariffs as a tool, perishable products traded with our neighbors need to have some leeway built in. We would assume any tariffs Trump imposes would have some delay in imposition so as to not totally wreck our food supply. Trump hasn’t said that, but part of negotiating involves keeping the other side guessing.
Of course, that leaves us guessing, too.
But live cattle and even boxed beef have a shelf life. And if the pandemic taught us anything, a very important part of people’s psychic vulnerability has to do with empty food shelves.
Not that the packers are taking the possibilities lightly. We’re told from up North that packers up there are stockpiling boxes in the U.S. to avoid the tariff for awhile. They will ship to eastern Canada if the flow of beef in from the U.S. is cut off by retaliation. They are also moving feeder cattle they own into American feedyards just in case.
There is another consideration. U.S. packers are already coping with not enough cattle to run plants at the most efficient level. Cutting off another five to 10 percent of the supply or having to pay big tariffs on cattle from Canada would be a significant problem, at least for certain plants.
We will update as we find out more.
Our address: Agribusiness Freedom Foundation, P.O. Box 88179, Colorado Springs, CO. 80908.
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