David Anderson doesn't know what will happen April 2, but he is preparing for the worst.
Earlier this month, United States President Donald Trump paused proposed 25 per cent tariffs on some Canadian and Mexican goods until April 2. Should the U.S. go ahead with its tariffs, Anderson said that would be catastrophic for Canada's horse-racing industry.
Anderson would know. He operates Anderson Farms — one of Canada's leading thoroughbred and standardbred breeding operations — in St. Thomas, Ont., and is the president of the Canadian Thoroughbred Horse Society, the official registry of thoroughbred horses in this country.
"It's all breeds, it's show horses, ponies for kids, draft horses. All kinds of breeds will be impacted," he said.
If enacted, the tariffs would impact the travel of thoroughbreds across the border and thus the breeding season, which began last month and usually runs until June. Many Canadian-based mares are bred to Kentucky stallions before returning to Canada to deliver a registered Canadian-bred foal.
Last year, the top-three finishers in the $1-million King's Plate — the first jewel of Canada's Triple Crown — were all Canadian-bred horses by Kentucky sires, including winner Caitlinhergrtness by Omaha Beach.
A Canadian-born horse entering the U.S. would be subject to the tariff while one born in the U.S. would be subject to a reciprocal levy when coming into Canada.
A temporary entry permit covering a year from the date of border crossing is available. But it requires cash to secure a bond equal to the tariff value and the owner can request a refund if the mare returns to Canada within the year, with proof of re-entry.
Last year, 268 Canadian yearlings (thoroughbred and standardbred) were sold for approximately US$12.4 million. The breakdowns were 157 thoroughbreds for over $7.6 million and 110 standardbred for roughly $4.8 million.
If breeders are forced to post a bond at the border on horses produced in Canada — regardless of whether the stallion is Canadian or American — and pay a 25 per cent tariff based on the eventual auction sale prices in the U.S., that would result in US$3.1 million — roughly C$4.5 million — based upon last year's figures.
Horse owners and breeders could also face whatever retaliatory measures Canada instituted if the American tariffs went ahead as planned.
"The buzz words right now are 'fluid,' and 'clear as mud,'" Anderson said. "I've been working with Tom Rooney (president/CEO of the National Thoroughbred Racing Association) on the American side trying to figure out what we're going to be facing going south of the border.
"It (tariffs) will affect all aspects but right now it's going to be the breeders, which is the foundation. If there's no horses being bred there won't be horses for the entry box. You're shutting down the manufacturing plant, so to speak."
The tariffs threat has forced Anderson to change how he does his horse-racing business south of the border.
"I sell all of my yearlings in the United States, they're all Kentucky-sired," he said. "So my entire yearling crop that I'll be selling this fall is going to be subject to a 25 per cent tariff.
"I've sent all of my yearlings to Kentucky before April 2."
Before this latest pause, there were indications American border agents could apply 25 per cent fees to shipped semen crossing the border. That would be based on the stud fee, which is the amount charged to breed a stallion if there was a live foal a year later.
Consider standardbred stallion Bulldog Hanover — harness racing's fastest horse ever — currently stands at Seelster Farms in Lucan, Ont. His stud fee is US$15,000 and a 25 per cent tariff would result in a $3,750 added cost to American breeders every time the horse's semen crossed the border to breed a U.S.-based mare.
Usually it takes two shipments to impregnate a mare but sometimes can be as high as nine. In such a scenario, the breeding costs would increase 75 per cent to $26,250 ($15,000 stud fee, $11,250 in tariffs).
Last year, American clients accounted for between 23 and 55 per cent of the business for Ontario's top-three standardbred farms that stand stallions — Winbak Farm, Seelster Farms and Tara Hills Stud — depending on the stallion. Significant U.S. tariffs would threaten losses of between 25 and 50 per cent, according to Ontario Racing.
Anderson is unsure exactly what might happen April 2.
"I can't read (Trump's) mind," Anderson said. "There isn't one politician outside of the United States, one international leader who can understand it.
"In theory, I guess, I see what he is trying to do (protect American jobs/resources) but these things need to be planned."
Anderson said if the tariffs become a reality, he can see those in Canadian horse industry facing a very tough decision.
"I guess in theory in this case if we want to stay in the horse business we're all going to have to pack up and go to the U.S.," he said. "Am I going to sell my farm and lay off my people who've been with me for over 30 years and go to Kentucky, buy a farm and kind of start all over again with new people?
"I don't know if I'm going to do it."
Anderson said Canadian horse people could still do business with those in Europe, Japan and Australia. But while getting horses to and from points overseas would be expensive, the cost would pale in comparison to the proposed 25 per cent levy.
"The horse industry knows no political or economic borders," Anderson said. "We're are all driven by a shared passion for the sport and industry we've built together.
"From Europe it's $25,000 in airfare but on a $5 million horse it's cheaper than paying $1.25 million in tariffs. From a breeding perspective, our genetic pool is tight enough … genetically it's important to mix into your programs. It (going more internationally) wouldn't be a bad thing in many ways, it just would be a lot more expensive."
This report by The Canadian Press was first published March 20, 2025.
Dan Ralph, The Canadian Press
