Submitted by Bill Fernie
26th August 2026
Canada could use potash as a weapon against US farmers, and it would be a particularly powerful lever because the United States is unusually dependent on Canada for this fertiliser. But there is an important twist: Canada has just chosen not to use that weapon in its latest retaliation.
Canada announced on 25 August that from 8 September it will impose retaliatory tariffs of 15%, 25% and 50% on about C$27.6 billion of US goods. However, the current measures deliberately exclude potash and energy, despite Canada's enormous leverage in those areas.
Why potash matters so much to American farmers
Potash supplies potassium, one of the three major nutrients needed for crops. It is particularly important for corn, soybeans and wheat.
And Canada is not just another supplier.
Canada supplies roughly 85% of US potash imports, according to Reuters.
That means a Canadian decision to restrict or heavily tax potash going into the United States could have a disproportionately large effect on American farmers.
Imagine a farmer in Iowa, Illinois or Indiana preparing to plant corn. He can't simply decide:
"I'll buy Canadian potash somewhere else."
There are alternative sources — Russia, Belarus and other producers — but replacing Canada's supply quickly would be difficult and potentially expensive.
And the timing would be politically interesting.
The American Corn Belt is already under considerable financial pressure.
US grain farmers are facing a combination of low crop prices, expensive diesel and high fertiliser costs. The Financial Times reported this week that fertiliser prices have risen above $900 a tonne, while diesel has reached around $5.45 a gallon.
So if Canada suddenly put a significant tariff on potash, the American farmer could be hit from another direction.
It could look something like this:
Canadian retaliation → higher US potash price → higher fertiliser bill → higher cost of producing corn/soybeans → lower farm margins.
And that is much more politically sensitive than putting a tariff on an obscure manufactured product.
But Canada knows it would hurt itself too.
This is why Mark Carney is being careful.
Canada's potash industry is enormously important to Saskatchewan, and Canadian producers depend heavily on the US market. If Canada deliberately disrupted that trade, American farmers would suffer — but Canadian potash producers would also lose customers.
That is exactly why Reuters described Carney as cautious about using Canada's leverage over potash, despite the fact that Canada supplies the overwhelming majority of US imports.
There is also a strategic consideration.
If Canada suddenly weaponised potash, Washington would have a powerful argument for trying to develop alternative supplies much more aggressively.
The US could encourage domestic potash mining, increase imports from other countries and potentially provide subsidies to American producers.
Canada might win the immediate battle but lose some of its long-term market.
Here's where the Corn Belt idea becomes very interesting.
If the trade war continues, potash could become a political weapon even without Canada imposing an export ban.
Suppose Canada imposed, say, a 25% export tax or tariff on US-bound potash.
Even if the Canadian producer technically paid the tax, much of the additional cost would probably eventually be reflected in the price paid by American farmers.
And because the US imports so much Canadian potash, farmers wouldn't have many immediate alternatives.
That makes fertiliser rather different from many of the other goods now caught up in the trade war.
Canada can say:
"We don't have to put tariffs on American farmers' corn. We can make producing that corn more expensive."
That would be a very clever — and potentially very damaging — form of retaliation.
And there is a second-order effect.
This is the part I think is particularly worth watching.
If American farmers respond to expensive fertiliser by using less fertiliser, crop yields could eventually suffer.
That could reduce US corn and soybean production.
And then something rather strange could happen:
A trade war designed to protect American industry could contribute to higher American food prices.
The effect wouldn't necessarily appear immediately. Farmers make fertiliser decisions months before harvest. But the consequences could eventually work through into corn, livestock feed, meat, food processing and ultimately supermarket prices.
So your instinct is right.
Canada probably has more leverage over the economics of American farming than the headline tariff figures suggest.
But at the moment, Ottawa appears to understand that potash is a nuclear option. It has the ability to hurt American farmers very quickly, but using it could damage Canadian producers and encourage America to permanently diversify away from Canadian fertiliser.
That makes the fact that Canada has specifically left potash outside its latest retaliation quite significant.
And given the current pressure on Corn Belt farmers, if Canada eventually changed its mind and targeted potash, that could become one of the most politically explosive developments in the whole US-Canada trade war.
The danger is this could pushup food prices worldwide.