Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 18, 2025, Winnipeg, Manitoba A4 ● WINNIPEGFREEPRESS.COM U .S. president-elect Donald Trump hasn’t yet retaken the Oval Office but has already caused a flurry of disruption within Manitoba’s — and Canada’s — busi- ness world. Business leaders, associations and government officials have been meeting across the country, asking the same questions: how legitimate is Trump’s threat of a 25 per cent blanket tariff on Canadian imports? What do we do if those tariffs appear? Trump first made the comment in November. He’s doubled down since, proposing tariffs as a driver for improved border security, then saying he’d use economic force to acquire Canada as a 51st state. Nearly $42 billion worth of goods is traded between Manitoba and the United States annually, according to data from the Canadian Chamber of Commerce. Almost 1,800 Manitoba companies export to the U.S; 63,179 jobs are sup- ported by those exports. “The concern is making sure that we’ve got a consistent voice from Manitoba, in terms of what steps we’re going to take,” said Chuck Davidson, president of the Manitoba Chambers of Commerce. “At the end of the day, everyone sees this as a lose-lose situ- ation.” Premier Wab Kinew was in North Dakota on Jan. 6 representing Manito- ba’s economic interests. He convened with fellow premiers in Ottawa on Jan. 15, days away from Trump’s Jan. 20 inauguration. Vehicle manufacturers, consumer goods creators and the oil and natural gas industry stand to be “dispro- portionately affected,” said Andrew DiCapua, a senior economist for the Canadian Chamber of Commerce. Chemicals, fats and oils, mineral products, machinery and transporta- tion items are among Manitoba’s top exports to the United States. But the proposed tariff is broad — and the economic impact would be drastic, DiCapua noted. The Free Press delved into three of Manitoba’s export-heavy industries — agriculture and agri-food, manufactur- ing and mining — to find how they’re preparing for Trump’s threatened tariff. Manufacturing uncertainty PALLISER Furniture is looking both south and north with trepidation. The Winnipeg manufacturer exports its goods to the United States from Manitoba and Mexico. Trump has threatened 25 per cent tariffs on goods crossing from both borders. “We hope that it’s just threats,” said Peter Tielmann, president of Palliser Furniture. “Having said that, we have to get ready for the worst.” Tielmann spent time in Toronto meeting Canadian government and business leaders in the week leading up to Trump’s inauguration. Tariffs — and what to do should they materialize — dominated the conversation. Roughly 60 per cent of Palliser Furniture’s Manitoba-made goods are shipped to the United States, Tielmann ballparked. In Mexico — the compa- ny’s larger site — some 70 per cent of items travel north. Palliser Furniture is contemplating expanding its manufacturing presence in the United States. “We think by transferring some manufacturing goods to the U.S. and finishing them off there, we may be able to reduce the … impact of the tariffs,” Tielmann said. His company isn’t alone. Nearly half of Canada’s manufacturers plan to shift some production to the United States if tariffs are imposed, a Canadian Manufacturers & Exporters membership survey found. Forty-eight per cent of the 311 re- spondents said they’d freeze hiring or lay off staff should tariffs come; 46 per cent projected postponed or cancelled investments. Terry Shaw, CME regional vice-president for the Prairies, said he’s had conversations with members who are expediting shipments to the U.S. ahead of potential tariffs. “Folks are doing what they can right now.” Palliser Furniture hasn’t done much shipment acceleration; it has finite capacity, Tielmann said. Speeding up would require hiring and training more workers, which takes time. “We’re maximizing all capacity, we make as much as we can,” Tielmann said. Still, 30 per cent of Canadian manu- facturers have been accelerating U.S. shipments, the CME survey found. Thirty per cent have delayed invest- ments, 22 per cent are freezing hiring and 28 per cent are searching for alternative markets. Manitoba alone counts 2,399 manu- facturing establishments. The industry accounted for 10 per cent of the prov- ince’s GDP in 2022 and pulled $26.4 billion in sales in 2023. Two years ago, it counted $14.8 billion in exports. “We need to continue reminding everybody that the impacts will not be felt solely on one side of the border,” Shaw said of a blanket 25 per cent tariff. Decreased manufacturing exports will negatively affect the trucking industry and will tighten the wallets of thousands of manufacturers, leading to less spending on retail, restaurants and other sites reliant on disposable income, Shaw outlined. Earlier this week, he contacted the province’s business deputy minister and inquired about regular tariff up- dates. Shaw envisions daily or weekly convenings with members to keep them abreast of developments. “It certainly reminds me a touch of what we saw during COVID,” Shaw said. Agriculture apprehension AT Kroeker Farms staff have been reassuring U.S. customers that if Trump imposes a 25 per cent tariff on goods from Canada, the Win- kler-based company will continue to ship its products as usual. “We’ve spent many years and lots of hard work in finding great customers across North America and the last thing we’ll do is give up those cus- tomers,” CEO and president Wayne Rempel said. With a staff that ranges between 250 and 320, Kroeker Farms is one of Canada’s leading potato producers and Manitoba’s largest grower of organic potatoes. The company exports more than 75 million pounds to the U.S. annually. “My optimistic side tells us that (a tariff is) not going to be applied to fruits and vegetables because recipro- cal treatment would be very punitive for the U.S.,” Rempel said. “It would be the last thing I think that they will want to tax.” Still, the prospect of a tariff “does scare us a little bit,” he said. That trepidation is being felt across Manitoba’s agriculture and agri-food sector, which is a significant economic driver for the province. The U.S. is the top export market for the keystone province’s agri-food products. In 2023, Manitoba shipped more than $4.5 bil- lion in agri-food products to the States. “People don’t want anything to im- pact the free flow of goods,” said Colin Hornby, manager of communications and stakeholder relations at Keystone Agricultural Producers. “We just want to see a ‘Team Canada’ approach and make sure that we’re all sort of talking about the impact of anything that could negatively affect those cross-border trade activities.” Founded in 1984, Keystone has approximately 4,600 farmer members who produce a variety of agricultural products. The organization is also supported by 20 commodity group members. Keystone has been trying to antici- pate what might happen once Trump takes office. Hornby and Keystone president Jill Verwey were in Iowa at the beginning of the month as part of a Canadian delegation at the Ag Chairs Summit organized by State Agriculture and Rural Leaders. The delegation spoke with American legislators and people from the U.S. ag industry about the shared issues they face. “Those conversations were very positive when we spoke to state-level legislators and the American industry,” Hornby said. “They all understand the importance of the Canada-U.S. trade relationship and that it’s foundational to the success of our economies.” In a recent interview with Pembi- na Valley Online, Cam Dahl, general manager at Manitoba Pork, said trade relations with the U.S. remain a top priority for the province’s pork indus- try in 2025. “We ship about three million pigs to the U.S. each year and export 90 per cent of the eight million pigs we raise annually as pork or live animals,” Dahl said. NEWS I FRONT AND CENTRE SATURDAY, JANUARY 18, 2025 Manitoba business leaders draw up defence plans but still face many unknowns after months of tariff talk, threats ‘WE HAVE TO GET READY FOR THE WORST’ GABRIELLE PICHÉ, MARTIN CASH AND AARON EPP KEN GIGLIOTTI / FREE PRESS FILES General Manager at Manitoba Pork, Cam Dahl, said the company ships about three million pigs and exports 90 per cent of the eight million pigs raised as pork or livestock to the U.S. each year. TIM SMITH / THE BRANDON SUN FILES Some potato harvesting companies say they will continue to ship their products, having spent years building customers across North America. MIKAELA MACKENZIE / FREE PRESS Terry Shaw, Canadian Manufacturers & Exporters regional vice-president for the Prairies, said Manitoba manufacturers are poised for a major hit should U.S. president-elect Donald Trump impose the tariffs he’s threatening. MIKE DEAL / FREE PRESS FILES Palliser Furniture president, Peter Tielmann said 60 per cent of Manitoba goods go to U.S. ● CONTINUED ON A6 ;