We are proactive in diversifying our trade relationships
The Canadian Wool Council (CWC) is a non-profit organisation focused on developing practical opportunities for the Canadian wool industry and those who work within it. The CWC represents the entire Canadian wool value-chain from producer to consumer and is the official delivery partner for The Campaign For Wool in Canada. In view of the recent imposition of 25 per cent tariff on Canadian products by US President Donald Trump, Fibre2Fashion speaks to CWC CEO Matthew J. Rowe about the impact of the tariff on Canadian wool producers, supply chains, and global trade dynamics, as well as the industry’s strategies for adaptation and resilience.
The 25 per cent tariff by the US on Canadian wool products is expected to have significant consequences. Can you elaborate on the immediate and long-term impacts on Canadian wool producers and manufacturers?
The 25 per cent tariff on Canadian wool products will cause immediate and long-term disruptions for wool producers and manufacturers, particularly those closely tied to the US market (which is the majority). In the short term, businesses may face supply chain bottlenecks and higher production costs. In the long term, while the tariff could spur local manufacturing and investment, it may also drive businesses to diversify export markets and adapt to new global trade dynamics. Overall, the industry will need to focus on innovation, specialisation, and strengthening domestic demand while seeking new markets to remain competitive.
Given that 72.9 per cent of Canadian wool exports go to the US, how severe could the decline in trade be?
The Canadian wool industry is still experiencing long-term effects from the disruptions caused by the COVID-19 pandemic. It is likely that the percentage of raw wool exports to the United States is now lower, as Canadian wool exports have been in decline for several years. Over the past decade, China has emerged as an important export market due to its unparalleled processing capacity and is likely to remain so for a significant portion of greasy wool exports. In terms of higher-value finished goods, we are looking to grow wool markets in Europe and Japan to make up the decline in the US trade.
The Canada-US wool industry is deeply integrated, with products crossing borders multiple times during production. Could you explain how this tariff might disrupt existing supply chains and affect pricing, production, and employment?
We will see major disruptions for the majority of our businesses that trade closely with the United States. Given the small size of Canada’s textile manufacturing sector, shifting production will be challenging. Textile was one of the first supply chains to be integrated and much of what remains in Canada is still dependent on supplying the US market. In certain niches, like wool suits, Canada supplies millions of units annually and tariffs jeopardise that business model and put jobs at risk. Likewise for US manufacturers, we are one their biggest customers. So, we may see similar production and employment issues there too.
Do you foresee a shift in the way Canadian wool is processed and sold? Could this lead to diversification in export markets, or would it be challenging to find alternatives?
The renewed interest in Canadian wool as a place-based, sustainable, and renewable fibre has been growing for several years and will continue regardless of changes in our trade relationship with the United States. There is strong potential for small- and medium-sized wool businesses to benefit from increased domestic demand, driven by the ‘Buy Canadian’ movement. However, businesses of all sizes that rely on the US market will need to adapt and seek new customers in other countries. Canada benefits from a number of free trade agreements and maintains close ties with high-value wool markets, including the EU, the UK, and Japan. This gives us reason to remain hopeful and proactive in diversifying our trade relationships.
What measures is the Canadian wool industry considering to mitigate the impact of the US tariffs? Are there alternative strategies to sustain business and employment?
The majority of Canadian sheep producers derive most of their income from meat production, with wool representing only a portion of their overall livelihood. As a result, the greatest impact will be felt in the processing and manufacturing sector, which has already been struggling for decades due to competition from lower-cost manufacturing in developing countries. In response, we are exploring new markets, including our upcoming trade mission to the UK, and aiming to generate leads at the International Wool Textile Organisation’s annual Congress.
The long-term sustainability of Canada’s wool and textile industry will depend on innovation and specialisation—factors that will help maintain our competitiveness and market demand, regardless of broader economic and political shifts. In that vein, last year we launched the first ever Canadian Wool Innovation Prize providing $10k (USD 7,400) in funding to new value-added Canadian wool products.
How can Canadian farmers and wool producers prepare for losses now that the tariffs have come into effect?
Since most Canadian wool producers earn the bulk of their on-farm income from meat sales, the exact impact of these tariffs will be complex—especially for those who operate multiple business streams, such as meat, wool products, and off-farm employment, which may all be affected simultaneously.
The CWC has urged both the US and Canadian governments to engage in dialogue. Have there been any signs of negotiation or reconsideration from policymakers on either side?
The Canadian government has been receptive to our calls. We are also pleased to be coordinating with sheep producer associations in key wool-producing provinces, such as Alberta and Ontario, to facilitate information-sharing, support their members, and provide a platform for collective advocacy. We also have the lines of communication open with our colleagues at American Wool. The current frustration is the instability and uncertainty of the whole situation.
Canada and the US have historically had a balanced textile trade, with both countries exporting approximately $1 billion in textile products over the past five years. Do you believe these tariffs could set a precedent for broader trade tensions between the two nations?
Textiles make up only a small fraction of both countries’ overall trade, so it is unsurprising that industries representing a much larger portion of the Canadian economy dominate the current conversation. To put it into perspective, Canada’s energy exports to the US in 2024 totalled $160 billion. However, the Canadian wool and textile industry supports a wide range of specialised jobs, skills, and intergenerational knowledge that, if lost, would be difficult to revive. Our focus should be on adapting to these new conditions by strengthening long-term competitiveness, investing in skill development, and diversifying trading partnerships.
How might this move influence future trade agreements or discussions between Canada and other global textile markets?
Beyond the US, countries in Asia, Europe, and Latin America are likely to remain Canada’s key trade partners in the textile sector. Trade tensions with the US may push Canada’s textile industry to build closer relationships with European and Asian markets, for example. In the wool sector specifically, the UK has long been a key trading partner due to our historical ties and similarities in sheep breed profiles. It remains to be seen how these shifts will unfold, but Canada has a strong foundation for expanding its global trade relationships, while building demand for locally manufactured products.
Interviewer: Shilpi Panjabi
Published on: 13/03/2025
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
