Canada is vowing to fight back against U.S. President Donald Trump’s sweeping tariffs that went into effect Tuesday, and potash could become a potent weapon in the growing trade war — but economists are urging caution.
Potash is a key ingredient in fertilizer, and roughly 85 per cent of the supply used by American farmers comes from Canada — particularly Saskatchewan, where potash is a major export market.
U.S. farming groups and even some Republicans aligned with Trump have called for potash to be exempted from the blanket tariffs out of concern for the agricultural industry.
Ontario Premier Doug Ford told reporters Tuesday that Saskatchewan Premier Scott Moe should consider no longer selling potash, uranium and oil to the United States and instead find different markets.
“We need to make sure America feels the pain,” Ford said. “Without potash down there, (the U.S.) doesn’t have a farming system.”
Prime Minister Justin Trudeau, while announcing a first round of retaliatory tariffs on U.S. products, said Canada would also look at non-tariff measures if necessary but did not answer directly when asked whether Ottawa might curb exports of potash or crude oil.
Moe has previously pushed back on the idea of restricting Canadian material exports to the U.S., and that Canada’s countermeasures should not disproportionately hurt any one province.
He said in a statement Tuesday that his cabinet would meet Wednesday to “consider all options” to respond to the U.S. tariffs, and reiterated calls for reduced interprovincial trade barriers and the promotion of pipelines and other infrastructure.
“American farmers need Canadian fuel and fertilizer to grow their crops,” Moe said. “Trump’s tariffs will drive up the cost of oil, potash and uranium and that will drive up the cost of groceries for every American family.”
Even with a decline in potash prices in 2023, Saskatchewan exported over $11.5 billion worth of potash that year. Nearly all of it goes to other countries, representing a full third of global production. The next largest producers, Russia and Belarus, make up another third combined, followed distantly by China.
The Canadian fertilizer industry said U.S. tariffs not just threaten food production and security on both sides of the border, but will also push American farmers toward those countries.
“Imposing U.S. tariffs on Canadian fertilizer imports will distort the U.S. market in favour of countries such as Russia and China, who do not operate under the same environmental, human rights and trade practices, undermining the critical trade goals of each of our countries,” a statement from Fertilizer Canada said.
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But Corey Rosenbusch, president and CEO of the Fertilizer Institute in Denver, Colo., said those countries won’t fill the gap left if the American agricultural industry moves away from Canadian potash.
“There would not be (enough) supply globally to completely replace that,” he said in an interview. “Even with tariffs we still will need Canadian potash.”
Nutrien, one of the largest potash producers in Saskatchewan, has warned the cost of tariffs would ultimately be felt by U.S. farmers. The company told Global News it has been engaging with policymakers and stakeholders in the U.S. and Canada to make the case against tariffs.
Other companies that mine potash in Saskatchewan — many of which are foreign-owned — declined requests for an interview or comment Tuesday.
Rosenbusch said farmers were able to import enough potash and other fertilizer products during February, when tariffs were temporarily paused, to prepare for the spring planting season that’s already underway in some states.
But he said importers saw price increases due to the uncertainty, and some had to turn to Russian potash due to the high demand.
He added 60 per cent of potash used annually in the U.S. is applied in the fall, meaning farmers will soon feel the impact of tariffs in the coming months.
Farming industry groups like the American Farm Bureau Federation say farmers have suffered losses on most major crops for three straight years amid high global inflation and supply chain constraints, with tariffs further adding to those woes.
“This is not a great time for them to see increased input costs,” Rosenbusch said.
In February, after Trump first announced the tariffs on Canada and Mexico but before he temporarily halted them, Republican Sen. Chuck Grassley of Iowa — a major agricultural state — said he was pushing for potash to be exempted from the additional levies, something also pushed by fertilizer and farming groups.
Asked Tuesday if he was still looking for a potash exemption, a spokesperson for the senator pointed to a comment Grassley made to reporters where he said he was taking a wait-and-see approach to Trump’s tariff policy.
“I’m still a free and fair trader,” he said. “The president won the election based upon the fact he was going to impose tariffs, and maybe it will work (to reduce or eliminate global tariffs).
“If he’s successful I’ll say ‘amen,’ and if he’s not successful I’ll say ‘I told you so.’”
U.S. Agriculture Secretary Brooke Rollins told reporters Sunday that she had raised the issue of increased potash import costs with Trump and other administration officials “and will continue to.”
Should U.S. exports be cut off?
Economists say cutting off potash exports to the U.S. would be unnecessarily escalatory and threaten food supply in both countries.
“I see significantly more risk for negative repercussions, but also in terms of public perception in the United States, as well as sort of indirectly here in Canada, that would make me hesitate thinking about using potash,” said Werner Antweiler, a professor and international trade policy research chair at the University of British Columbia.
“We don’t want to create a situation where the Americans hate us. … You want to have Americans kind of rally around us and make our case.”
Even curtailing oil and gas exports, which Moe and Alberta Premier Danielle Smith have strongly resisted, would be a less extreme move than cutting off potash, Antweiler said.
Canada imported $32 billion in agricultural products from the U.S. in 2023, and many of those items are now subject to Canadian counter-tariffs.
Carol McAusland, a professor of land and food systems at the University of British Columbia, said a better tactic would be to put an export tax on potash sold to the U.S. That would further raise prices for American farmers but ensure Canada collects some of that money, she said.
“What we want to do is let them know that we’re not just going to accept this,” she said.
She agreed that an export ban would be “kind of like going to the nuclear option.”
She added consumers may not see the impact of higher prices related to potash for some time, as the import cost increases work their way into the food supply chain. That will make it important for both Canadian and American stakeholders to make clear why consumers are paying more.
Growing domestic unrest may convince Trump to lift the tariffs or at least exempt agricultural products, UBC professor and global policy research chair Kristen Hopewell said.
“There is no question that Trump’s trade wars will severely hurt American farmers, one of his key constituencies,” she said in an email.
“American farmers are going to be squeezed on both sides. Their growing anger will put considerable pressure on Trump to remove his tariffs.”
Can potash be a trade war weapon for Trump tariffs? Experts urge caution
