Toronto, Ontario – As the trade war between the United States and China continues to escalate, Canadian markets are feeling the ripple effects, but there may also be new opportunities on the horizon. Ofer Baron, a professor of operations management at the University of Toronto’s Rotman School of Management, shared his insights with CTV’s Your Morning, explaining how Canada could potentially capitalize on these shifts in the global trade landscape.
Baron noted that the ongoing trade tensions between the U.S. and China could open doors for Canada, particularly in agriculture. While Canada’s soybean production is much smaller than the U.S.’s, which annually exports around 35 million tonnes to China, Baron believes there may still be opportunities to increase sales to China, though not on a large scale.
“There’s sort of two issues here,” Baron explained. “We can probably sell soybeans to China at somewhat higher prices than the market prices. But the U.S. soybeans that don’t go to China will enter other markets, likely lowering prices there.”
Although Canada’s soybean market is significantly smaller, Baron believes the country’s strategic position in the global market could lead to some gains, especially as the U.S. faces challenges in maintaining its export volumes to China.
Despite this, Baron pointed out that Canada’s smaller production capacity means that any gains would not be transformative for the nation. “We’re not a huge player in this market,” he said. “While we may increase our sales to China, it won’t be a game-changer for Canada.”
Baron also emphasized the importance of Canada’s ongoing trade relationship with the U.S., its largest trading partner. Leveraging this relationship could prove crucial in broader trade negotiations.
“We still have a significant trade relationship with the U.S.,” Baron said. “That gives us a unique advantage, especially in terms of resources.”
Looking ahead, Baron stressed the need for diversification in Canada’s trade approach to ensure long-term stability. “The main thing we’ve learned from the U.S.-China trade war is the importance of diversification,” he said, adding that Canada must reduce its reliance on a single supplier or customer to mitigate risks.
Baron concluded that smart negotiations and the pursuit of diversified trade ties will be vital to Canada’s success on the global stage. “We’re a much smaller player than the U.S. or China,” he acknowledged. “But by sitting down and negotiating, we can work to get better deals for Canadians.”
