RED DEER COUNTY – There will be no winners on either side of the border as the U.S. president follows through on threatened tariffs beginning Tuesday that will trigger tit for tat retaliatory measures effectively leading to a trade war, says a co-owner of Nixon Honey Farm.
“I can only speak from the small window that I look out for the business that I’m familiar with,” Kevin Nixon told the Albertan recently.
“But to me, there’s no winners,” Nixon said.
In remarks made at the White House Monday, U.S. President Donald Trump reportedly confirmed tariffs would be applied to most Canadian and Mexican exports entering the U.S. starting Tuesday, March 4.
Nixon Honey Farm, an Innisfail-area family-run operation, exports to the U.S. anywhere from roughly one-third to a half of the honey it produces, Nixon said.
“The U.S. is really our biggest export market for the Canadian honey industry. For ourselves, personally, we do export some there,” he said.
“A real frustration is the U.S. consumes double what they produce in honey, so they need honey,” he said.
“They import it from all over the world.”
And if there’s a 25 per cent tariff on honey produced in Canada, importing from other countries such as Argentina, India or Vietnam becomes more appealing. There is also the risk that U.S. importers start to offer prices available in other countries that don’t follow the same high-quality food production standards, he said.
“We’re price takers, like most things in agriculture.”
This all acts to compound issues Canadian honey producers are already grappling with. Speaking from a general industry-wide perspective, costs have continued to rise, he said.
“The honey market has been depressed for a year and a half now and so we’re already facing low prices and production hasn’t been good, just with drought conditions,” he said.
“When you combine low production and low prices, it doesn’t bode well. And then when you add a tariff into the mix, that hurts again,” he said. “It depresses our market even more.”
Furthering complicating a challenging situation would be retaliatory tariffs, he said.
“If we can support domestic businesses in equipment and supplies to operate our farms, that’s great,” he said. “But the fact of the matter is there are some things that aren’t produced here in Canada that we need, and we have to get it from there.”
He cited as one example the purchase of mated queens, the costs of which has already been increasing, he said.
“A queen bee now cost $50 and if you had a 25 per cent tariff on that if Canada retaliates and puts tariffs on product coming from the States, we’re losing on both sides.”
When the U.S. government initially announced late in January its intention to start imposing on Feb. 4 a 25 per cent tariff on Canadian imports with a reduced rate of 10 per cent on energy products, Nixon said he was in the middle of negotiating a deal.
“I called the buyer, and he’s like, ‘Yeah, we’ll still do it,’” said Nixon. “But he says they don’t want to act as the importer of record, which means that the bill was going to come to me for any costs of brokerage and duties and tariffs and everything. At 25 per cent, that’s a huge loss.”
The temporary 30-day pause announced when the tariffs were expected to come into effect provided a measure of relief.
“We ended up making the deal and we shipped it out here in the last couple weeks,” he said.
However, the lingering uncertainty makes planning ahead all the more difficult.
“Will the tariffs come back? Maybe, maybe not,” he said.
“It’s going to make it tough all year to make any contracts or deals very far out.”
Orders for supplies from the U.S. are placed late in the summer or early fall but typically are not shipped until later in the winter, he said.
“If things change in the meantime, then what do you do – cancel the order or bear the costs that come with it?”
Asked if the situation has perhaps prompted renewed efforts to explore or expand markets elsewhere, Nixon said they have in the past exported some product to Asia.
“But that market has kind of dropped off a little bit for us,” he said. “We’re having to move more pounds domestically into the States.”
Hopeful other international markets bounce back, he said such recoveries can be unpredictable.
“Currency plays a role in those decisions too when you’re doing business in other countries,” he said. “We definitely are open to opening up some new markets, but it takes a lot. Nothing happens overnight … it just takes time to build those relationships.”
In the meantime, the U.S. remains Canada’s largest – and closest – trading partner. But the tariffs threatened by the U.S. and the promised retaliatory measures are counterproductive.
“It’s a vicious cycle,” he said.
“Governments on both sides of the border have been spending the last number of years trying to get the cost of living down for people. And when tariffs come into play, somebody is going to pay for that,” he said.
“It’s not rocket science that the cost is going to get passed on to the customer somehow in the end, and that’s not going to help with decreasing the cost of living for people,” he said.
“There’s no winners in a trade war,” he reasserted.
Responding to a question about the provincial government’s focus that until recently has primarily revolved around seeking exemptions for oil and gas, he said, “The energy sector is an important one and a big one for Alberta; I totally understand that being one of the priorities.
“But I definitely think it should be broadened a little bit and look at what other major industries the province has that will be impacted,” he added.
“I think agriculture is definitely one of them. Not just from a honey production standpoint, but agriculture in general. There’s a lot of production based here in Alberta and Western Canada and it will impact a lot of people,” he said about a trade war.
“I hope they (the Alberta government) are keeping it on their priority list and that agriculture will fall in into those conversations (with U.S. officials),” he said.
Offering parting thoughts, he encourages Canadians to prioritize their local producers.
“Small family businesses and the family farms that are out there really need the support of people in the community."
