Sask. tariffs response to remain in place despite pause: Trade minister

Saskatchewan’s trade and export minister says the provincial measures put in place in response to the tariff war between Canada and the U.S. will stay in place for now, despite a pause on some of the tariffs.

Those measures include a directive barring liquor retailers from purchasing U.S. alcohol, and a separate measure directing the provincial government to prioritize Canadian goods and services in all procurement.

After implementing 25-per-cent tariffs on Canadian goods earlier this week, with a lower, 10-per-cent tariff on Canadian energy, U.S. President Donald Trump announced a pause on some of those levies Thursday. Trump’s latest executive order pauses the tariffs on goods meeting the rules-of-origin requirements under the Canada-U.S.-Mexico Agreement (CUSMA/USMCA), and drops the tariff on potash – a major export of Saskatchewan – to 10 per cent.

The pause is expected to run until April 2.

Speaking on The Evan Bray Show on Friday morning, Saskatchewan Trade and Export Development Minister Warren Kaeding addressed the tariffs and the provincial response. Kaeding said the province’s measures on alcohol and procurement will remain in place “until we get a far better understanding of what it means to us here in Saskatchewan.”

Listen to the full interview here, or read the transcript below.

The following transcript has been edited for length and clarity.

BRAY: It’s kind of like we’re on a bit of a tariff roller coaster right now. And yesterday we hear they’re off again temporarily for any exports that qualify under the CUSMA agreement. What does that mean, exactly?

KAEDING: That’s the million-dollar question. Evan and I know we had officials literally staying up all night to try and determine what, exactly, that means. And ultimately, it boils down to where the products are obtained and where they’re produced. Are they sourced from, you know, the three parties that are part of the USMCA agreement – so that’d be US, Mexico or Canada. And I’m going to give you an example. I’m afraid I have to read this verbatim, because it is a complicated process, but if the product is an automobile or an auto part, 75 per cent of that content must come from us, Mexico and Canada. Forty to 45 per cent of the vehicles content must come from a high-wage labor, meaning at least $16 an hour, and 70 per cent of the vehicle’s steel and aluminum must be North American for the product to qualify for USMCA. That’s just the automotive industry.

There’s this requirement for a certificate of origin, and it sounds like some industries, some businesses, have just preferred to go with this most favored nation trade rule, instead of actually doing the paperwork that would be required to fall under CUSMA.

KAEDING: And that’s our understanding. I think when the announcement was first made yesterday, only 38 per cent of the businesses in Canada export into the US were actually part or would be covered under the USMCA agreement. Fortunately in Saskatchewan, the majority, the greatest majority, we believed, were actually covered by the USMCA agreement, so they were going to be exempt, but you’re absolutely right. A number of businesses, just for business reasons, opted not to be part of that USMCA agreement. But it’s our understanding that the easily could come into into compliance. They just need to do a little bit of paperwork, probably reach out to the CSBA office and determine what it’s going to take for them to be compliant.

So we hear there’s a pause. We find this out yesterday, until likely that April 2 date, at least. Does it change anything in the path that the Saskatchewan government is taking?

KAEDING: Not right now, again, we’re trying to fully understand what this newest pause is going to create, and how it’s going to be reflected on Saskatchewan businesses. So we’ve just taken the position that we’re not going to change our initial response until we get a far better understanding of what it means to us here in Saskatchewan.

When you were assigned to this ministry, you’re probably not necessarily thinking you’re going to be in the middle of what you are in the middle of now. But I know you speak to many in the province that come from different areas, whether it’s the egg industry, whether it’s potash mining… what are you hearing from people in the province with regard to the tariffs?

KAEDING: You know, Evan, I was with a group of business people last night that honestly like the approach that the premier’s taken to this. You know, it’s a very calm, measured approach to a response to tariffs. Tariffs really help no one. They hurt everyone. And we have to remember that U.S. tariffs on Canadian products make it far more expensive for us customers, and I think that’s the first thing that we have to realize. And then from that, you know, tariffs are an absolute last resort – reciprocal tariffs. So again, we will reluctantly support that, you know, the federal government probably is going to need to do some targeted counter tariffs, but we want to be at the table to make sure that we’re able to determine who and what those targeted reciprocal tariffs are going to be (applied to). And I think what we’ve heard from business, well, I’ve even heard from from union leadership, is that they appreciate this strong but measured and calm approach that we’re taking to this.

A lot of (Saskatchewan’s response) had to do with procurement, pausing some capital projects, the liquor target – which I think has been pretty consistent across Canada. Have you put together a plan B, if the wave hits us again and tariffs ramp up?

KAEDING: I would say we’re discussing alternatives, but again, we know that this changes day to day. I mean, the first thing I do is wake up in the morning, read the headlines and go, “OK, I guess this is the direction we’re going to have to go today.” So it’s hard to have a plan B when even plan A is changing in front of us. It’s hard to have that that, I guess, response identified. We’re working on this daily. We’ve got officials certainly trying, reaching out, talking to our stakeholders, even trying to understand how it’s affecting them, and what’s their expectation of us as government in a response.

I like the approach that our government is taking in the province, with regard to potash, the worry that if you just cut it off, you’re absolutely going to impact jobs. We heard the premier say that. Is there, though, a way that we can use it as a bigger hammer? I think there are lots of people in industry in the United States that understand the importance of our potash. But can we wave it louder? Can we can we hold it up as as something that is a tangible, big threat that Saskatchewan can use?

KAEDING: Evan, there’s a significant risk of of using an industry like our potash industry that employs thousands of people in this province. There is a huge risk, if we use them as a tool in this war, that there’s going to be thousands of people that could potentially be out of work if, all of a sudden a significant reaction was made on the U.S. side. So that is something that we do not want to put on the table. And I think the premier has been very clear with our federal government that we do not want to risk our potash industry or uranium industry. Some of them play a significant role in in the US marketplace and certainly to support U.S. customers, to keep life affordable for them. We don’t want to use those as tools.

Minister, you talked about the measured approach and tone – and I want to emphasize tone – that the government has taken on this. We talked about this on the show the other day, and I am in total agreement with what our province is doing. I was shocked, and said I would like to have seen maybe a little more passion. I don’t need anger, but I was surprised that we didn’t see more from the premier in in terms of of that passion that I think we’ve seen him display, for example, with carbon tax. Was that a decision behind the scenes to take this very calm, measured approach?

KAEDING: Well, certainly the premier reflects what what cabinet, and I think what the people of Saskatchewan, are looking for. And I use the analogy, Evan, that when you’re working a customer service desk in a business and you’ve got one very angry customer that’s just pounding on the desk and wants results, and you’ve got somebody else who was there that just wants a solution to the problem, who that customer service person want to deal with first? That person that’s got that calm, measured approach to finding a solution to the problem, and (I) firmly believe that’s that’s what our premier believes is the best way to approach this.

Maybe this is a rhetorical question, but are we feeling more pressure on our provinces in this country because of the situation, the disarray we’re in with our federal government?

KAEDING: I tell everyone, I think we’re currently suffering from tariff whiplash. I think everyone’s gonna have to see a chiropractor when we’re done here, because this uncertainty is not good for anyone. It’s not good for any of our businesses trying to produce products here in Saskatchewan that they’re marketing across the country, or they’re marketing internationally, or marketing into the U.S. And so this uncertainty is is not helping anyone. You’re looking at businesses now that are maybe putting a pause on their on their expansion, or wanting to build up their workforce and want to move into a new skew of products. This is creating so much uncertainty, and we’re trying to find a way to, I guess, level that, to provide some certainty, to provide some calmness to our to our to our business sector here that we will get through this. We just have to take a calm and measured approach to it.

We’re a couple weeks away from Budget Day in the province. How challenging is this year’s budget you’re working on as part of cabinet, behind the scenes, getting that ready with this kind of moving uncertainty that we’re seeing?

KAEDING: This province has been doing very, very well on on trade, on production, on manufacturing, and I think the budget is going to reflect how well that we’ve been doing and we’re on a good path. Now certainly this tariff issue could put a wrinkle in that, but again, we’ve got a 30-day reprieve, so that’s going to continue to help our businesses survive through this. But I think we’re on a good path, Evan, and I think the budget is going to reflect that.

Before I let you go, it’s International Women’s Day tomorrow, and we have many influential leaders in our province, but I think all of us have someone in our life who has been an impact, had a major, major impact and influence. Who would that be for you?

KAEDING: My wife, Carla. You know, she’s been by me through all of this. We’ve farmed for 35 years. Certainly understands the issues they have in agriculture, and she’s been there. She’s a career woman. Raised a family, two significant boys have done great work in their careers, and now she still is a volunteer community supporter (and) still very, very big influence in my life.

Finance Minister Jim Reiter gave a short laugh Friday morning when he was asked about the tariff back and forth this week.

“I was about to say things change by the day, but they change by the hour and change by the minute. I hope this isn’t the new norm but it might be,” said Reiter.

He said Saskatchewan will navigate the situation as best as it can.

“This has to be driven largely by the feds but there’s been many meetings between the premiers and the prime minister, at officials level. Hope the lines of communication stay open with the federal government. Calmer heads need to prevail, nobody’s going to win with this, this is ridiculous. We need to get back to some semblance of normalcy,” he said.

Reiter and his ministry are in the final stages of putting together the provincial budget, and Reiter said they’re looking at how they’re going to deal with the tariff carousel – he wouldn’t say whether the province will include a contingency fund as other provinces have but did say those that have been going into deficit, so he doesn’t know if it really makes a difference.

On Thursday, as well as putting another pause on the wider tariffs the Trump administration lowered the potential tariff on potash to 10 per cent from 25.

Reiter still didn’t seem interested in putting any export tariff or fee on potash, saying it would be damaging to the province’s economy and to workers.

“No tariffs on this make any sense so, I guess, 10 is obviously less damaging than 25 but it’s still a mistake and it still shouldn’t be happening,” said Reiter.