Canadian wool and yarn producers are reconsidering long-standing ties with the United States as steep tariffs increase costs and complicate cross-border processing. The disruption is prompting some businesses to seek suppliers and customers overseas while renewing calls for greater investment in Canada’s domestic wool-processing capacity.
Tariffs Disrupt Canadian Wool Supply Chains
U.S. President Donald Trump’s tariffs have added paperwork and expenses for Canadian wool producers, retailers and hobbyists. Some businesses are now choosing to reduce or end their commercial relationships with American suppliers and customers.
Judy Enright Smith, owner of the Wabi Sabi yarn shop in Ottawa, said her frustration has grown as the trade dispute continues. The last time her American supplier visited, she wore an “Elbows Up” T-shirt.
“At first, it was business,” she said. “Now, it’s personal.”
The United States has imposed 50 per cent tariffs on greasy wool imports and certain finished wool products, affecting Canadian producers that send raw wool south for cleaning and processing.
Greasy wool is raw, unwashed fleece that can contain hay, insects and other material, along with lanolin, the oily substance naturally produced by sheep. Processing removes those materials and prepares the wool for manufacturing into yarn and other products.
Limited Canadian Processing Capacity Creates Challenges
Canada does not have the same level of industrial wool-processing capacity as the United States and some overseas markets. Much of the country’s domestic processing sector consists of mid-sized or artisanal operations.
That has historically pushed Canadian producers to rely on cross-border facilities. Increasingly, however, some are sending raw wool to countries including China and the Czech Republic to avoid U.S. tariffs and trade uncertainty.
Matthew Rowe, chair of the Canadian Wool Council, described the shift as an unfortunate rupture in a long-established trading relationship, particularly as wool prices are rising.
“Just as that’s happening, our biggest single market — the U.S. — is kind of closed to us now,” Rowe said.
“If you’re relying on cross-border supply chains to get something produced, it just doesn’t make economic sense anymore with these tariffs.”
Canadian Retailers Look Beyond U.S. Suppliers
Enright Smith said she is increasingly looking to Europe and Canadian producers to replace American labels in her Ottawa store.
Her U.S. supplier previously told Canadian customers they would be “hurting the little guy” if they stopped buying from the company because of frustration with Trump’s trade policies. Enright Smith said she viewed the argument as an attempt to shift responsibility for the commercial consequences of the tariffs.
She said she plans to decline when the supplier approaches her for another sale.
“I don’t mind losing American customers because they basically voted for the guy,” she said of Trump.
New Brunswick Mill Offers a Made-in-Canada Model
One company facing fewer direct effects is Briggs and Little, a New Brunswick woollen mill that first opened in 1857.
The company buys wool from a co-operative in Carleton Place, Ont., and manufactures its products domestically, reducing its exposure to cross-border processing costs.
However, office manager Leah Little said the company still relies on some U.S.-made machinery parts and materials that can be affected by tariffs.
“We do hope this mess is resolved before we need to replace any of our machinery parts that are not available in Canada,” she said.
Rowe called Briggs and Little an exception within the Canadian industry and a strong option for consumers looking to purchase domestically produced yarn.
Industry Calls for More Canadian Wool Processing
Anna Hunter, a shepherd and owner of Long Way Homestead wool mill in Ste. Genevieve, Man., believes the current trade disruption highlights deeper structural weaknesses in Canada’s wool industry.
Hunter, author of The True Cost of Wool, stopped shipping products to the United States after Trump cancelled the de minimis exemption for imports, which had allowed shipments valued below US$800 to enter duty- and tariff-free.
She said the industry was already struggling with supply-chain disruptions dating back to the COVID-19 pandemic.
“When I saw that wool was again included on this extra 50 per cent tariff list, I thought, ‘How many more hits will Canadian wool have to take before we start talking about creating a new system?’”
Hunter processes about 5,000 pounds of wool annually, which she said represents only a fraction of the wool collected from her sheep.
Regional Mills Could Strengthen Domestic Textile Sector
Hunter envisions a more decentralized Canadian wool industry supported by regional processing facilities capable of handling different varieties of fleece. Such a system, she argues, could strengthen both agriculture and Canada’s broader textile sector.
Building that capacity would require governments and consumers to view wool as an agricultural commodity worthy of investment rather than simply a byproduct of sheep farming.
“We’re going to have to really wrestle with how our clothing system has become completely disconnected from agriculture and from our own economy,” Hunter said.
She added that rebuilding the sector should be a long-term goal regardless of developments in Washington.
“For those of us who are deeply passionate about the sheep industry and about Canadian wool, it does matter,” Hunter said. “And we do need to reckon with it — not just because of this madness coming out of the White House, but because we want to see a future with Canadian wool thriving and being an important part of our agricultural commodities and a part of our textile industry.”
Fall Season Could Test Canadian Producers
Rowe warned that continued trade tensions could make the fall particularly difficult. The season is crucial for wool and yarn businesses as Canadians prepare for colder weather, and some producers can generate a year’s worth of profit during the fall buying period.
The Canadian Wool Council is advocating for expanded domestic mill capacity and new supply chains to reduce the industry’s vulnerability to cross-border disruptions.
For an industry shaped by generations of Canada-U.S. economic integration, Rowe said unwinding those relationships is “almost jarring.” But with tariffs reshaping the economics of cross-border trade, Canadian wool producers are increasingly looking at how a stronger domestic processing network could provide greater resilience for the future.
William Faulkner was a Nobel Prize-winning American novelist and short story writer renowned for his innovative literary techniques and profound exploration of the American South. His works remain among the most influential contributions to twentieth-century literature.