Trudeau's Ketchup Gaffe, Explained
Canada is floundering as it determines how to respond to Trump's tariff promise. Trump, Trudeau, and most of our politicians are missing the bigger picture and opportunity.
If you buy tomatoes this time of year, check the little food-grade label with the four-number product codes or a disclosure posted on the shipping boxes grocers often include with the tomatoes on their shelves. “Food grade” means it is edible. You can eat those little stickers on tomatoes and other fruits and vegetables, but I don’t recommend it. But you need not fear if you have accidentally consumed part of one from a sliced tomato on your hamburger.
It’s probably only a matter of time before the Food and Drug Administration (FDA) or the Federal Trade Commission (FTC) forces producers to put warning labels on their stickers—something like this. Then again, President Donald Trump has placed a moratorium on new regulations (pending review), so there’s that.
It’s not hard to find plenty of other examples of seemingly silly warning labels on everything from ladders to chainsaws. But the stickers on the produce are informative and valuable. Many contain UPC or QR codes that allow you to scan for supply chain information, such as where that watermelon or tomato was grown. I love the transparency.
However, produce grown for further processing, such as Roma tomatoes for ketchup, can be tricky and less transparent, if only because supply disruptions can cause changes. For example, a drought in the carrot-producing regions of Ontario might force a carrot processor to find carrots in Michigan. Canada is even more protective of its agriculture than the US, and any such supply changes require the approval of an industry trade association, Food Processors of Canada. Label changes are expensive, especially for an industry with low-profit margins, so they resist.
Here’s something else you may not know. California is our nation’s top tomato producer, thanks to a terrific and long growing season. But most tomato seeds are cultivated in. . . . wait for it. . . northwest China. China has been trying to enter the processed tomato business, as a result, for several years. Perhaps that is changing.
This is especially true for produce and products that cross the US-Canada-Mexico borders between the grower, the processor, the distributor, and the grocer. A good example is my former employer, the Campbell Soup Company (now called Campbell’s Company). They used to operate manufacturing plants in Listowel and Toronto, Ontario. Both were closed many years ago. Both plants made products for the US and Canadian markets and featured ingredients and packaging from both countries. And when determining whether a product is “Made in the USA” or “Produit du Canada,” it gets complicated.
Beef is another example, and it drives many American cattle growers crazy. They have successfully demanded labeling for the country of origin. There are no nutritional or other differences between Canadian and US steaks and hamburgers. Cows born in the US are sometimes shipped to Canada for fattening and transported to US meat rendering facilities. It’s not uncommon for a food ingredient to cross the border several times from farm to factory to grocer or restaurant. I’ve never heard American consumers complain about Canadian food products (China and Mexico are another matter, given their history of food safety issues).
Country of origin labeling is an easy way to punt decisions about food integrity to largely uninformed consumers. Ideally, food inspected for sale in the US must meet the same safety standards regardless of where it comes from. Too many Americans, however, remember too many stories about pets and children being poisoned by tainted Chinese products.
Side note: Campbell’s Listowel, Ontario facility was prohibited from selling soup to the US military, thanks to a World War II-era bill known as the “Berry Amendment,” even if most of the ingredients were made in the US and assembled by a friendly ally an hour’s drive north of the border. Instead, the US military bought soup from the military and then from a Dutch-owned food company with a manufacturing plant in the Philadelphia suburbs. Go figure. Save us from that dangerous Canadian soup! Sadly, the buy American-only Berry Amendment is precisely the kind of law that Trump and a lot of Members of Congress like. Meanwhile, sensitive electronic equipment made in Canada is exempt from the Berry Amendment. But soup!
Xenophobia and jingoism (and related politics) in public policy can complicate supply chains, creating inefficiencies and forcing higher prices for many products. While the threat of tariffs can be beneficial, their imposition can also be disruptive, job-killing, and expensive.
There have been efforts to circumvent the Berry Amendment. Twenty-five years ago, the outgoing Clinton Administration and its then-Army Chief of Staff, Gen. Eric Shinseki, contracted with a Chinese manufacturer to make black berets for the US Army. The Clinton Pentagon claimed that US manufacturers couldn’t produce enough of the new berets fast enough for an upcoming Army anniversary. Weeks after taking office, the Bush 43 Administration directed Gen. Shinseki to torpedo that. Shinseki later served as Secretary of Veterans Affairs during the first Obama Administration.
Cars are even more complicated. There are auto manufacturing plants on both sides of the border, and it used to be said that an auto part might pass the border six or seven times before finding its way into a Michigan-assembled Ford or an Ontario-assembled Lexus. Reading the auto parts disclosure of origin on the sales sticker of a new car is like reading the membership list for the United Nations.
Then there is the history of the US government and corporate support for maquiladoras—manufacturing plants—just south of the US border. This support helped Mexican workers stay in Mexico and improved the border economy by reducing costs for US companies. The late US Rep. Jim Kolbe (R-AZ), who represented a Tucson-based border district now primarily held by Rep. Juan Ciscomani (R-AZ), was a strong champion of maquiladoras.
“Maquiladoras (also known as ‘twin plants’) are manufacturing plants in Mexico with the parent company's administration facility in the United States,” writes the City of San Diego, California’s official city website. “Maquiladoras allow companies to capitalize on the less expensive labor force in Mexico and also receive the benefits of doing business in the United States. Companies operating in the United States can send equipment, supplies, machinery, raw materials, and other assets to their plants in Mexico for assembly or processing without paying import duties. The finished product can then be exported back to the United States or to a third country.”
We don’t hear much about maquiladoras these days. Many workers across the country, especially in the industrial Midwest, can tell stories about US manufacturing operations and jobs being outsourced to Mexico and China, including Hershey Foods. Food companies, in particular, are always hunting for supply chain efficiencies along with sales and marketing gains. In 2006, Hershey moved to replace cocoa butter with vegetable oil (i.e., seed oils for you RFK Jr. fans) as a cost-saving move, even as those reformulated products didn’t meet the FDA’s “standard of identity” for chocolate. They followed that up by closing plants in California and Ontario in 2007 for a new one in Monterrey, Mexico. Rick Lenny, the Hershey CEO behind both changes, left Hershey at the end of that year.
Outgoing Canadian Prime Minister Justin Trudeau has most recently been affected by a failure to grasp the complexity of North American supply chains. He has inexplicably flailed and failed in his response to Trump’s threats of tariffs on Canadian-made goods flowing across the 49th parallel, this time involving ketchup.
Trudeau references counter-veiling tariffs imposed on targeted US products six years ago when Trump first imposed aluminum and steel tariffs on Canada. Canada carefully selected consumer products like Kentucky bourbon and Heinz ketchup for tariffs. Things were worked out, but many innocent food and beverage makers were sidelined.
Never mind that not only is Heinz ketchup sold in Canada made entirely from Canadian tomatoes (Leamington, Ontario, an hour’s drive southeast of Detroit along Lake Erie’s coast, is the home of Canada’s hothouse tomato industry), but for the past five years has operated a Canadian processing facility in the Mont Royal area of Montreal, just 15 minutes from Trudeau’s constituency office. French’s Ketchup is made with Canadian-made tomatoes and is also a US-owned company. The Kraft Heinz Company is headquartered in Chicago and Pittsburgh; French’s, part of spice giant McCormick and Company, is headquartered a short drive north of Baltimore, Maryland.
However, Heinz does not make Canada’s iconic ketchup-flavored potato chips. That would be Frito Lay, a subsidiary based in Dallas, Texas. Frito is the largest subsidiary of PepsiCo, headquartered in lovely Purchase, New York.
Heinz was not pleased with Trudeau’s outdated and inaccurate reference to the origins of its famous ketchup, which is sold in Canada. Food companies usually don’t openly criticize public officials, but the lame-duck Trudeau, with a dismal approval rating and a penchant for stupidity, is fair game.
Heinz also makes its iconic macaroni and cheese in Canada. Many candy companies have moved to Canada to escape America’s world-high sugar prices (Wrigley-owned Life Savers candy production was moved from Holland, Michigan to Montreal, Quebec in 2002). However, under Canadian regulations, the product is not called “Macaroni and Cheese” because it doesn’t contain enough real cheese. Instead, it is called Kraft Dinner.
I get why Trump likes tariffs. They use the power of the world’s largest and most affluent consumer market for leverage over importing nations to help promote US exports and protect and attract manufacturing jobs. Conversely, Trump would be wise to learn lessons from the Bush 43 Administration when it first tried to harness the economic and trading power of a more unified North American market. It was called the Security and Prosperity Partnership of North America (SPP). I spent a lot of time on this initiative during my food career.
Established in 2005, it essentially died with the end of the Bush Administration in early 2009. However, many of its efforts to streamline the regulatory relationships between the US, Canada, and Mexico continued. The food world culminated in the FDA and the Canadian Food Inspection Agency agreeing to declare their food safety systems “comparable.” It was an agreement over two decades in the making and helps reduce duplicative food safety inspections. It was but a small start in the larger, never-ending mission (by some) to more fully integrate North America’s economy to erase competitive advantages enjoyed by Europe’s integration.
Another example. All thirty nations in the European Union have the same truck weight limits and other standards. While the EU’s government is notoriously bureaucratic, their respective national economies are well integrated with a single currency (I am not recommending that here in North America). Trucks carrying goods from Bologna, Italy, can drive to Copenhagen, Denmark, without worrying too much about differences in regulations and stopping for nothing more than diesel.
Not so in North America. Canada’s truck weight limits are nearly 16,000 pounds more per truck than on US interstate highways, close to Europe’s. There are warehouses in Canada where trucks headed to the US offload goods to meet US Interstate highway truck weight limits, which is silly, expensive, and wasteful.
Thanks to so-called safety advocates and cowardly Members of Congress, efforts to match US limits with Canada with safer trucks have failed. It’s a long story, and our failure to address that issue, among others, makes our goods more expensive and hurts job creation, along with putting more big trucks on highways.
I hope Donald Trump and Canada’s next prime minister will focus on better integrating and streamlining our economies and regulatory systems. I have no more food safety concerns eating poutine in Quebec than at the Iowa State Fair. Poutine’s biggest threat may come from Robert F. Kennedy Jr. and his MAHA crowd. Not exactly Keto friendly, that’s for sure. Except for the cheese kurds.
The late former Canadian Ambassador Michael Wilson once extolled the virtue of the US and Canada making things together. That’s certainly true for cars and food. If you’ve built a new home the past 30 years, there is a good chance it was constructed with Canadian lumber. The better we do at reducing regulatory standards and barriers, streamlining our trade relationship, and becoming a more competitive economic bloc, the better off everyone will be, including American and Canadian workers and consumers, transcending partisanship.
It’s called a “win-win.” Canadian Conservative opposition leader Pierre Poilievre gets it, even as Trudeau and his Liberals do not. Let’s hope Trump and the people around him do. Bringing back the North American Competitiveness Council with that goal in mind would be brilliant.
ADDENDUM: I’m not a huge ketchup consumer, but my favorite is Rao’s, now owned by Campbell’s. Pricey, but worth it. My grandson loves it. Five ingredients including cane sugar. No high fructose corn syrup (HFCS), not that there’s anything wrong with that (Campbell’s and other soup makers use a small amount of HFCS in their tomato soup to reduce acidity, which is why Rao’s adds cane sugar). I don’t know where their Roma tomatoes come from, and I don’t care. I just hope the new owners don’t screw it up.
Great information and insight Kelly. Thanks!
Lots of information about food and politics. Thanks.