European retaliatory tariffs on U.S. corn have helped increase Canadian grain shipments to Europe through the St. Lawrence Seaway, a rare bright spot in a time of tit-for-tat duties among the United States and its trading partners.
The rise in exports of grain – including corn, used for animal feed and ethanol – is another sign of how U.S. President Donald Trump’s penchant for slapping tariffs on imports is upending global trade flows.
Canadian grain shipments are up 16 per cent this year on the Great Lakes-St. Lawrence Seaway, which links growers in the Prairies and Ontario with overseas buyers through such ports as Thunder Bay, Hamilton and Trois-Rivières. Overall cargo volumes rose 4 per cent. Coal shipments rose 30 per cent, while shipments of iron ore fell 13 per cent, according to St. Lawrence Seaway Management Corp. data.
European tariffs on United States corn have benefited other exporters such as Canada.Fred Lum/Globe and Mail
“We’ve seen a significant increase in corn exports,” said Ian Hamilton, chief executive of the Hamilton Port Authority, which saw March-to-August grain shipments rise 115 per cent over the same period last year. “Europe is always a large importer of corn, but this year a heat wave has meant European livestock producers have been relying on more imported corn as feed. European tariffs on United States corn have also benefited other exporters like Canada."
In June, the European Union began taxing 341 U.S. goods, including orange juice, bourbon and crops, in retaliation for Mr. Trump’s new duties on steel and aluminium imports. Several other countries, including Canada, also responded with tariffs on U.S. goods.
The tariff war escalated Tuesday, as China said it would impose another round of tariffs on US$60-billion worth of U.S. goods after the Trump administration levied taxes on US$200-billion in Chinese imports.
Arlan Suderman, chief commodities economist for U.S. brokerage INTL FCStone, said China’s 25-per-cent tariff on U.S. soybeans effectively closed the United States’ biggest agricultural market. Chinese buyers switched to Brazilian corn and soybeans, which quickly shot up in price.
“The buyers we talk to in China say they are basically afraid to do business with the United States even if they are willing to pay the tariff. Government officials have been pressuring them pretty strongly not to do business with the United States,” Mr. Suderman said from Kansas City.
Canada is a “net winner” in the tariff war Mr. Trump launched against China’s restrictive trade policies, Mr. Suderman said, and will see trade benefits along with the rest of the world if the President succeeds in defeating China’s restrictions on U.S. agricultural goods.
“Tariffs are bad. Tariffs have been bad for U.S. growers. Surprisingly the majority of farm votes seem to be sticking with President Trump, for now, hoping that the tariffs will be effective at reducing trade barriers into China, because China had already been using tariffs and various restrictive policies to block U.S imports of … just about every agricultural commodity outside of soybeans,” Mr. Suderman said. “Certainly, if the United States is able to force changes in China’s trade practices, that is good for the world.”
Eric Atkins