U.S. slaps duties on fresh Canadian mushrooms over subsidy claims
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WASHINGTON — The United States has put countervailing duties on fresh mushrooms grown in Canada following a U.S. Department of Commerce investigation which the Canadian industry has called “deeply flawed.”
The change, posted in the federal register on Monday, will slap most fresh mushrooms with tariffs of 2.84 per cent.
Two companies received separate duties: Champ’s Fresh Farms Inc. was hit with a tariff rate of 1.62 per cent and Farmers’ Fresh Mushrooms Inc. was hit with a tariff rate of 4.97 per cent.
Separate anti-dumping duties are expected to be added later this month.
The preliminary Commerce investigation said Canadian mushroom producers received unfair government subsidies.
Mushrooms Canada CEO Ryan Koeslag said last week that Canadian growers haven’t engaged in unfair trade practices and producers are not receiving special treatment.
In a news release, Koeslag said the Commerce department’s justification is linked to mainstream agricultural tax treatment, including provincial sales tax exemptions available to farmers generally.
“Treating broad-based agricultural tax measures as unfair subsidies is contrary to common sense and unfairly penalizes Canadian mushroom growers for participating in programs available across the agricultural sector in any number of countries,” Koeslag said.
Mushrooms Canada said under U.S. trade law, a subsidy must meet specific legal requirements before it can be countervailed and the group does not believe those requirements have been met.
“It is difficult to reconcile Commerce’s preliminary approach with the fact that comparable agricultural tax treatment exists in the United States,” Koeslag said.
The Commerce department launched the investigation in January after receiving a complaint from the U.S.-based Fresh Mushrooms Fair Trade Coalition. The group said tax exemptions meant Canadian mushrooms were unfairly subsidized and claimed Canadian mushroom imports had grown in recent years while domestic mushroom consumption remained relatively flat.
Giorgio Mushroom Co., which is part of the U.S. coalition, said in a news release Monday that the duties are an important step.
“For years, American mushroom growers have faced enormous pressure from unfairly subsidized mushroom imports that distorted competition and threatened domestic production,” said Giorgio Mushroom CEO Mark Currie.
William Pellerin, a partner in international trade at McMillan LLP, said the Commerce investigation would not look at the specific agriculture subsidies that U.S. producers might be receiving — even if it is similar to what Canadian companies get.
Pellerin, who is not involved in the mushroom case, noted the preliminary subsidy amount is extremely low but the Commerce investigation into Canadian mushrooms is still ongoing.
When Canadians think of countervailing and anti-dumping duties they often look to lumber tariffs. Those tariffs, which predated the Trump administration, have also increased in the last year.
Pellerin said Commerce investigations like the one around fresh mushrooms generally are not U.S. administration-led tariffs.
The Canadian mushroom industry would be able to push back on the countervailing duties under the appeal mechanism through the Canada-U.S.-Mexico Agreement on trade, better known as CUSMA.
Countervailing and anti-dumping duties are separate from U.S. President Donald Trump’s massive tariff agenda. Trump has used different tools to hit countries around the world with tariffs and Canada is also being hammered by his sector-specific duties on things like steel, aluminum, automobiles and cabinetry.
But Trump’s push to realign global trade through tariffs may see more agricultural industries in the United States follow the mushroom coalitions’ lead and push for Commerce investigations, Pellerin said.
“I think that’s going to be not just the United States,” Pellerin said. “We are seeing them in Canada vastly increase also where Canadian associations are bringing cases against agricultural products from around the world.”
This report by The Canadian Press was first published May 18, 2026.
Kelly Geraldine Malone, The Canadian Press
Canadian mushroom growers warn new U.S. tariffs could ‘flood’ domestic market
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With a July 1 deadline to review the Canada-U.S.-Mexico Agreement (CUSMA) around the corner, new U.S. tariffs are set to take effect next week, this time on Canadian mushrooms.
“This is about 4,300 square feet of growing space,” said Mike Medeiros, owner of Carleton Mushroom Farms in Osgoode, Ont., as he toured his facility Saturday.
It is a massive and modern, but family-run, mushroom farm that grows, harvests and packages mushrooms in house.
An impressive “300,000 pounds per week” is how much Medeiros’s farm produces, making it one of the bigger players in the Canadian mushroom market.
But new U.S. tariffs set to be imposed on Canadian mushrooms Monday will take a toll on his business, even though his mushrooms stay in Canada.
“Forty per cent of the mushrooms in Canada are shipped to the U.S., and so what’s going to happen is as tariffs increase going to the U.S., there might be more mushrooms in Canada and then it would flood our market,” said Medeiros.
A fact sheet released this week by the U.S. Department of Commerce showed Canadian mushrooms will face new tariffs of up to five per cent, citing unfair government supports.
“They’re the same in the U.S. as they are in Canada,” said Ryan Koeslag, the executive vice-president of the Canadian Mushroom Growers’ Association, in an interview with CTV News.
“We’ve always been operating under the rules and regulations of fair trade between Canada and the U.S., and so the reason they identified this, I think, is they haven’t been able to find anything else.”
Known as countervailing duties, the same measures used to tariff Canadian softwood lumber, the tariffs are imposed on imports the U.S. deems are being unfairly subsidized.
But Canadian mushroom farms are just the latest example of a clear signal being sent by the Trump administration, targeting Canada’s agricultural sector.
“Ultimately the U.S. farmer is very powerful politically,” said William Pellerin, an international trade lawyer with McMillan LLP in Ottawa.
“There’s a broad trend to look at agricultural products coming into the United States and apply tariffs where the U.S. deems it’s important to do so,” he said.
Medeiros says the move could force him to start producing less.
“Once we start cutting back production, we would definitely have to look at cutting back staff to keep payroll in check,” added Medeiros.
Canadian mushroom farmers export almost exclusively to the U.S., and while industry says it will fight the new tariffs – that will still take time.
Jeremie Charron
Opens in new windowJournalist, CTV National News
