Canada Gives Mustard a Reprieve in Retaliatory Trade War

July 11, 2018, 3:22 PM UTC

Canada’s retaliatory tariffs on U.S. goods hit a wide spectrum of products, but a push from Canadian farmers ensured that mustard won’t be hit with higher costs.

The condiment was originally on the list of U.S. goods that would see higher import taxes as part of a burgeoning global trade war, however it was dropped just before July 1, when the tariffs went into effect. Ketchup, though, is still subject to the duties.

Canada’s action came after the U.S. imposed tariffs on Canadian steel and aluminum and President Donald Trump ratcheted up anti-Canada rhetoric. While Canadian Foreign Minister Chrystia Freeland said “we will not escalate and we will not back down” to the U.S., the country did capitulate to pleas from Canadian mustard seed farmers.

Canada grows more mustard seeds than any nation on earth. The fear was a tariff on mustard imports would drive down the price of mustard seed exports. And the U.S. is Canada’s biggest customer for those. (The fear of U.S. tariffs on those seeds was also front of mind.)

Farmers sell the seeds to U.S. companies, which then sell the finished product back to Canada. And Canadians are crazy about their mustard. Last year, they bought $43.9 million worth of French’s mustard—nearly four times the amount the country spent on ketchup.

Canada’s part in the escalating global tariffs battle is small compared to China. Trump, earlier Wednesday, announced tariffs on $200 billion more Chinese goods.