WHISTLER, B.C. — The deputy chief economist of Farm Credit Canada has some surprising statistics to share about trade with the United States.
Des Sobool told delegates attending the 2025 Pulse & Special Crops Convention that 92 per cent of Canada’s total exports to the U.S. went into the country duty-free in June.
That compares to 79 per cent in January before U.S. President Donald Trump began his tariff war with the world and later proudly showed off his “Liberation Day” tariff chart.
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Sobool said it would seem counterintuitive that more of Canada’s exports are now entering that market tariff-free. A staggering 97.5 per cent of Canada’s agri-food exports to the U.S. faced no duty crossing the border in June.
He called it a “really good news story.”
However, the bad news is that total trade volumes to the U.S. are down 21 per cent between January and July.
And it’s not like the rest of the world has absorbed those lost sales. Trade to all other countries is down 16 per cent over that time.
Agriculture exports to the U.S. have fared better, falling only seven per cent, while food and beverage exports have remained flat.
Sobool had a warning for those who think Canada simply needs to diversify away from the U.S. market, shifting from a north-south trade flow to an east-west flow utilizing Canada’s ports to access overseas markets.
He noted that 76 per cent of Canada’s agri-food exports typically flow to the U.S. with a total value of $35 billion.
There have been suggestions that Canada should decrease that reliance to 50 per cent, or $23 billion.
“We’d have to find other markets for that $12 billion,” he said.
“That’s a lot.”
Even if Canada could find the rail and truck capacity to get that volume of product to port position there would need to be a huge expansion in the already strained port infrastructure and capacity to ship the product overseas.
“Moving away from the U.S. is going to be tough,” said Sobool.
He noted that the North American agri-food supply chain is intertwined and would be difficult to unravel.
“We have to ride out the storm,” Sobool told delegates.
In the meantime, Canada needs to focus on improving its agricultural productivity, which plateaued in the 1991-2000 period and has been on a steady decline ever since.
Productivity for the 2021-2030 period is expected to slump to 1970s levels.
The U.S. has eight times the population of Canada, but its investment in agriculture technology is 23 times as much.
“We are lagging behind,” he said.
If Canada’s agricultural productivity got back to 1991-2000 levels it would boost net farm income by $3 billion per year.
“That’s a huge amount to add to your margins,” said Sobool.
That’s why FCC has committed to investing $2 billion in AgTech companies by 2030.
Sobool said improving productivity could be the “golden ticket” to helping improve economics in the agriculture sector.
