Tariff dispute could squeeze US farmers via Canadian potash supply

Uncertainty alone could thin fertilizer orders before any new tariff

The US-Canada tariff dispute has now reached American farms, according to an agricultural economist who studies how trade rules affect farming decisions. With Canada’s announced retaliation — a 15% to 50% tariff on roughly $20 billion in US goods set to take effect September 8 — attention has turned to a key agricultural vulnerability: the United States imports more than 80% of its potassium fertilizer, which comes from potash, from a single basin in Saskatchewan, Canada.

In an article republished by UPI from The Conversation, Jayash Paudel, an associate professor of economics at the University of Oklahoma, wrote that “the enduring effect of this trade war on U.S. agriculture, if it continues to escalate, won’t be a single bad season.” “Across thousands of farms,” Paudel wrote, “farmers may have to reduce their fertilizer use as prices — already high from supply disruptions because of the war in Iran — rise.” The lasting impact could emerge later in smaller future harvests if the tariff dispute continues, Paudel wrote, with little visible consequence at first.

Canada’s announced retaliation list does not currently include potash. The targets include dairy products and agricultural equipment. But Paudel wrote that “if pushed too far,” Canada could levy export tariffs on potash and, potentially, even on oil, natural gas and electricity, raising the price for US buyers. “The widespread impact that such a move would have on U.S. consumer prices may give Canada leverage going forward,” Paudel wrote.

Crops require three main nutrients: nitrogen, phosphorus and potassium. Potassium comes almost entirely from potash. American mines produce less than 1% of the global potash supply, and the US imports more than 80% of its potassium from the Elk Point Basin in Saskatchewan — what Paudel called “geology-based U.S. constraints in agriculture.” Notably, potash was not included in the US tariff list. “Taxing such a key agricultural input would have raised costs for American growers,” Paudel wrote.

The two countries’ agricultural sectors are deeply integrated. Canada imported about $28 billion in US agricultural products in 2025, and farm equipment is assembled from parts that cross the border. Live cattle and processed foods also move in both directions. Paudel noted that when the US and China engaged in a tariff dispute during the first Trump administration in 2018, Chinese retaliatory tariffs on US soybeans and automobiles cut US agricultural exports to China by $7 billion to $10 billion a year as Chinese buyers shifted to Brazilian suppliers.

American farmers are already under financial pressure on fertilizer costs. Paudel wrote that what he described as “the U.S. and Israeli war with Iran” had “shut down shipping through the Strait of Hormuz,” cutting off a large source of nitrogen fertilizer and raising fertilizer and fuel prices. A Farm Bureau survey in April 2026 found that 70% of farmers said they could not afford all the fertilizer they needed during spring planting.

How farmers respond depends on the nutrient. Nitrogen washes out of soil and must be reapplied every year. Potassium and phosphorus build up as a reserve. Paudel compared the practice to a fuel gauge: a farmer facing high prices can skip an application and briefly live off that reserve, but not indefinitely. Restoring potassium in soil takes time, with several pounds of fertilizer needed for every pound of soil-test potassium recovered, spread over years. Even a one-year restriction on potash access can have an impact, Paudel wrote.

Uncertainty has its own effect on farmer decisions. Fertilizer is often bought months ahead of planting, and a farmer who cannot predict next year’s costs may delay the purchase and hope prices will ease. “Hesitating in the fall can mean less goes on the ground in the spring,” Paudel wrote, adding that “uncertainty alone can reduce what gets applied before any tariff exists.”

If higher prices or short supplies for potassium fertilizer do arrive, the effects — including the chance of smaller yields — would reach the grocery store in the form of higher food prices long after the tariffs were likely to be lifted, Paudel wrote.

The fertilizer analysis arrives one day after Canadian Prime Minister Mark Carney announced retaliatory tariffs on roughly $20 billion in US goods, set to take effect September 8. As MSI previously reported, Canada’s list targets steel, dairy products, appliances and farm equipment — though not yet potash.