09/05/2026
🇨🇦 A trade war that began with tariffs on major industries is now hitting one of Canada’s smaller agricultural sectors — wool and yarn.
Canadian wool producers, mills and retailers say new U.S. tariffs are making cross-border business increasingly expensive, complicated and, in some cases, no longer worth the cost.
The United States has imposed 50% tariffs on greasy wool and certain finished wool products, creating major problems for Canadian producers whose supply chains depend on processing facilities across the border.
“Greasy wool” is raw wool taken directly from sheep after shearing. It contains lanolin, hay, dirt and other material and normally needs to be cleaned and processed before becoming yarn or other finished products.
🇨🇦 The problem for Canada:
Canada does not have enough large-scale wool-processing capacity. Many Canadian producers therefore rely on foreign mills to wash, process and turn their wool into finished products.
With U.S. tariffs making that supply chain more expensive, some Canadian producers are now looking elsewhere.
According to the Canadian Wool Council, producers are increasingly sending raw wool to countries such as China and the Czech Republic instead of relying on U.S. processing facilities.
Matthew Rowe, chair of the Canadian Wool Council, described the situation as a major disruption to a long-standing trading relationship.
The timing is particularly difficult because wool prices are rising, yet Canada’s biggest single market — the United States — has become far harder to access.
Canadian businesses are changing course
Ottawa yarn-shop owner Judy Enright Smith, who runs Wabi Sabi, says the dispute has become more than a business issue.
She has decided to reduce her reliance on American brands and suppliers and is looking toward Europe and Canadian producers to fill the gap.
Her message reflects a broader shift among some Canadian businesses: instead of continuing to depend heavily on U.S. suppliers, they are trying to build alternative Canadian and international supply chains.
🇨🇦 One Canadian mill offers a different model
Briggs & Little, one of Canada’s oldest wool mills, is relatively protected because it processes its wool entirely in Canada.
The New Brunswick company, which dates back to 1857, buys Canadian wool and manufactures its products domestically.
But even Briggs & Little is not completely insulated. Some machinery parts and materials come from the United States and could become more expensive because of tariffs.
Producers want Canada to build its own wool industry
Manitoba shepherd and wool-mill owner Anna Hunter says the current crisis exposes a much deeper weakness in Canada’s wool industry.
She stopped shipping to the United States after the Trump administration ended the US$800 de minimis exemption for small imports, another change that made cross-border sales more difficult.
Hunter argues that Canada needs to stop treating wool simply as a byproduct of sheep farming and instead recognize it as an agricultural commodity with its own economic value.
Her vision includes regional processing facilities across Canada, allowing producers to clean and process different types of wool closer to where it is produced.
She also says Canadian consumers can help by checking labels and choosing Canadian-made wool products.
A warning for the wider economy
The wool industry may be small compared with Canada’s auto, steel or energy sectors, but the situation illustrates a much bigger problem.
For decades, Canadian and American businesses built highly integrated supply chains. When tariffs suddenly make crossing the border significantly more expensive, those relationships can become economically unsustainable.
Canadian producers are now looking for new customers, new processing facilities and new markets — including Europe and Asia.
But industry representatives warn that rebuilding supply chains that took generations to develop will not happen overnight.
For Canadian wool producers, the message is becoming increasingly clear:
Diversifying away from the U.S. may be necessary — but the economic cost of breaking decades-old trade relationships is real.
Source: The Canadian Press.
