Trump, Tariffs And Potash

By Richard Dowson - Opinion/Commentary

News Headlines

Nutrien plans to build a One Billion Dollar Potash export terminal at Longview, Washington

Trump considering putting tariffs on Canadian Potash

U.S. sanctions removed from Belarus – it will begin shipping Potash – “Belarus … previously accounted for about 20% of global potash fertilizer exports…”. (CTV)

Position

Canada can longer rely on the United States. Canada is restructuring its world trade patterns.

Saskatchewan Potash producer Nutrien, plans to invest $1,000,000,000 U.S. in a potash export terminal at Longview, Washington, USA, on the Columbia River, eighty miles inland from the ocean. They intend to ship Canadian Potash to Asian markets.

There is a Canadian alternative to Longview – the Port of Kitimat B.C.

Nutrien rejected Vancouver, 1750 Km from Regina, because of congestion.

But Kitimat is 3 to 4 days closer to Asian markets than Longview. Kitimat is on a wide coastal inlet 690 Km north of Vancouver and 1122 Km north of Longview, Washington (2 or 3days by ship). Kitimat is a deep-water, ice-free port with everything Nutrien needs. They have existing Rail and Road connections to all of Canada; a modern airport and ongoing Portdevelopment. Potash is a Dry Bulk cargo. There are no shipping restrictions.

When choosing Longview, Nutrien considered the cost of railway transportation. The distance from Regina to Longview and from Regina to Kitimat is about the same.

Here’s the Arithmetic:

Regina to Longview, Washington – Regina to Kingsgate Border Crossing (Eastport, Idaho) 864 Km – Eastport Idaho to Longview 886 Km. Total distance: 864 + 886 = 1750 Km

Regina to Kitimat: Regina to Edmonton, 782 KM – Edmonton to Kitimat 997. Total distance: 782 + 997 = 1779 Km.

Since distances are same, railway freight costs will be the same. And if the Rail Freight Rate from Eastport Idaho is in U.S. dollars, the freight to Kitimat would be cheaper.

Given trade wars, tariffs and trade uncertainty, investing $1,000,000,000 U.S. in the Canadian Port of Kitimat, instead of the Longview, Washington seems like the better choice.

Writer Richard Dowson is a retired educator.

He is known for his frequenting local coffee shops and other places seniors gather.

In a previous life he wrote comedy for CHED in Edmonton.