June 4, 2018 / 7:17 PM / 5 months ago

With maple syrup tariff, Canada-U.S. trade dispute spills beyond metals

TORONTO (Reuters) - Canada’s retaliation against U.S. President Donald Trump’s steel and aluminium tariffs includes proposed duties on maple syrup, a nod to a national symbol and a powerful industry in the French-speaking province of Quebec that could hurt producers in Maine.

FILE PHOTO: People roll up maple taffy on a wooden stick at the Chemin du Roy maple grove in St-Augustin, Quebec, Canada, April 11, 2008. REUTERS/Mathieu Belanger/File Photo

While small in dollar value, the tariff shows how Canada’s retaliation has turned a dispute over metals into a broader conflict, touching many sectors.

Quebec, Canada’s second-largest province by population,

accounted for about 72 percent of the world’s production in 2017, but U.S producers were eating into Canada’s market share.

Vermont is the biggest syrup producer in the United States, but most of Canada’s imports come from Maine, according to data from Statistics Canada.

“The government here is trying to have maximum political impact, so that members of Congress, whether senators or congress-people, put pressure on Trump to say look, this is hurting us,” said Patrick Leblond, a trade expert at the University of Ottawa.

Canada last week proposed tariffs on goods ranging from ball point pens, to mattresses to toilet paper, after the United States said it would impose 25 percent and 10 percent duties on Canadian steel and aluminium.

The list also includes a 10 percent duty on maple sugar and syrup. In 2017, Canada imported C$16.9 million (£9.8 million) worth of those goods, three-quarters of which came from Maine.

Because Canadian trade data combines sugar and syrup, it is not clear what proportion of Maine’s syrup was exported. The state produced about 3.5 million kilograms (7.7 million lbs) of syrup in 2017, according to the U.S. Department of Agriculture.

A Canadian government source, speaking broadly about how targets were chosen, said the government sought products that could be found easily outside the United States, and focused on final goods to avoid distorting supply chains.

With only four electoral votes, Maine does not have the political clout of large swing states targeted by the tariffs, like Florida. But one of the state’s senators is Susan Collins, a Republican, who has repeatedly criticized Trump.

Lyle Merrifield, president of the Maine Maple Producers Association, said he does not expect the tariff to have a huge impact, but he criticized Trump’s tariffs.

“I think it’s unfortunate,” he said. “I think it’s a little ridiculous, really. I don’t blame Canada for doing it back.”

The Federation of Quebec Maple Syrup Producers controls the market, issuing quotas and maintaining a Global Strategic Maple Syrup Reserve, which stockpiles syrup to stabilize prices.

The industry directly supports about 10,000 full-time jobs in Quebec, which has a provincial election scheduled later this year.

Alexandre Moreau, who wrote a critical report about the quota system for the conservative institute earlier this year, said the tariff will help the Federation amid growing imports from the United States, where prices have dropped.

“It becomes cheaper and cheaper to import U.S. maple syrup,” he said. “In the long run, it’s kind of worrisome for Quebec producers.”

Editing by Denny Thomas and Marguerita Choy

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