U.S. tariffs push Canadian wool producers to shift supply chains overseas
With 50% tariffs on greasy wool and finished products, Canadian mills are shipping raw wool to China and the Czech Republic, while some retailers are cutting U.S. suppliers entirely.
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The U.S. imposed 50 percent tariffs on greasy wool imports and some finished wool products, forcing Canadian producers and retailers to untangle themselves from their biggest market and redirect supply chains across the globe.
Greasy wool—raw, unwashed product from freshly shorn sheep—contains lanolin, an oily substance extracted and sold to cosmetics companies. After lanolin removal, the wool is cleaned and processed into yarn and finished goods. Canada lacks industrial processing capacity at the scale of the U.S. and other countries, so most Canadian producers rely on foreign mills to transform greasy wool into final products. More producers are now shipping raw wool to China and the Czech Republic to avoid U.S. tariffs and trade tensions.
"Just as that's happening, our biggest single market—the U.S.—is kind of closed to us now," said Matthew Rowe, chair of the Canadian Wool Council. "If you're relying on cross-border supply chains to get something produced, it just doesn't make economic sense anymore with these tariffs."
Retailers are making their own calculations. Judy Enright Smith owns Wabi Sabi yarn shop in Ottawa. "At first, it was business. Now, it's personal," she said. Despite some customers' preference for U.S. labels, Enright Smith no longer stocks them on moral grounds. When her American supplier reaches out this year, she said, she will decline. "I don't mind losing American customers because they basically voted for the guy," she said, referring to Trump.
Briggs and Little, a New Brunswick mill that opened in 1857, is one of the few mills that process wool entirely in Canada, shielding it from the brunt of tariffs. The mill buys wool from a co-operative in Carleton Place, Ontario, and manufactures products on-site. However, even Briggs and Little uses some U.S.-made parts and materials subject to tariffs. Office manager Leah Little said the mill is assessing the impact.
Enright Smith is looking to Europe to fill the gap and sourcing more wool products directly from Canada, hoping domestic production can expand beyond its current mid-sized and artisanal scale.
How many Canadian mills process wool entirely domestically without relying on U.S. or foreign mills?
What is the total volume of Canadian wool exports being rerouted away from the U.S.?
We'll update this story as answers emerge.
By the numbers
What tariff rate did the U.S. impose on greasy wool imports?
The U.S. imposed 50 percent tariffs on greasy wool imports and some finished wool products.
Where are Canadian wool producers now shipping raw wool to avoid U.S. tariffs?
Canadian producers are shipping raw wool to China and the Czech Republic to avoid U.S. tariffs and trade tensions.
Which Canadian mill processes wool entirely within the country?
Briggs and Little, a New Brunswick mill that opened in 1857, is one of the few mills that process wool entirely in Canada, shielding it from the brunt of tariffs.
