Farmers across North America are riding a wave of economic uncertainty, thanks in large part to the ongoing global trade war & tariffs and shifting interest rates.

Christian Lawrence, head of Cross-Asset Strategy at Rabobank, says the effects of the Trump administration’s trade strategy are hitting the agriculture sector hard.

“We’re seeing a lot of volatility right across markets, particularly in currency markets, which tend to be a bit of a relief valve for tariffs,” says Lawrence.

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That volatility is influencing everything from fuel costs to fertilizer prices. For Canadian farmers and producers, there’s added pressure as the Bank of Canada cuts interest rates further, while the U.S. holds firm.

“In the United States, the market is expecting rate cuts, but I don’t,” says Lawrence. “I think inflationary pressures are going to be heading higher in the U.S., and tariffs are a risk to that. They could boost inflation even more. But I think even without tariffs, we’re going to see more inflation in the U.S., simply because of the structure of the housing market and the rising goods inflation recently. It’s an environment where the feds can’t really cut much.”

Compounding the issue is the ongoing tariff situation with China. Last fall, China imposed a 100% tariff rate on Canadian canola oil and meal, the result of its anti-discrimination investigation launched after the federal government slapped tariffs on Chinese-made EVs, steel and aluminum.

The ongoing economic tug-of-war is leaving producers caught in the middle, left to manage the risk while waiting for stability that may still be a long way off.