The U.S. put tariffs on Mexico, Canada and China; two countries have already responded
Farmers woke up on Tuesday caught in a trade war pitting the United States against three important ag export markets.
As of 12:01am on March 4, President Trump placed 25 percent tariffs on all goods coming from Canada and Mexico. Canadian energy will face a 10 percent levy.
And all products coming from China will be charged a 20 percent tax.
U.S. farm groups are raising the alarm about the implications of this trade war.
About 85 percent of the U.S. potash supply comes from Canada, and farmers’ margins are already thin enough, said Zippy Duvall, president of the American Farm Bureau.
“For the third straight year, farmers are losing money on almost every major crop planted,” he said in a statement. “Adding even more costs and reducing markets for American agricultural goods could create an economic burden some farmers may not be able to bear.”
The Illinois Production Cost Report estimates this tax could increase the price of potash by more than $100 per ton.
The USDA is projecting an increase in farm income in 2025 with government payments helping support producers.
Farmers for Free Trade says these tariffs will put farmers at risk of losing markets, facing higher input costs and retaliation.
The group is committed to “educating the public about the impact of tariffs through the voices of farmers, ranchers, business owners, and trade experts,” Brian Kuehl, the organization’s executive director, said in a statement.
Two countries have already retaliated.
On March 4, Canada announced its own 25 per cent tariffs on $30 billion of imported U.S. products, with the potential for the list to increase to $155 billion.
The list includes poultry, pork, dairy products, fruits and vegetables, and alcoholic products.
The tariffs will remain in place until the U.S. removes theirs. And non-tariff measures could be part of Canada’s plan too, Prime Minister Trudeau said in a statement.
Ontario and Nova Scotia Premiers Doug Ford and Tim Houston, for example, directed their provincial liquor regulators to stop selling American alcohol.
Canadian farm groups are also concerned about the impact of a prolonged trade war.
More than 40,000 Canadian farmers produce canola, and each one will feel the effects of the trade uncertainty.
“The uncertainty created by this situation continues to impact farmers as they inch closer to planting the 2025 crop,” says Rick White, Canadian Canola Growers Association President & CEO. “The damaging blow caused by tariffs will be felt by every canola farmer, starting with the price they receive at delivery and will extend to the full range of their operations, ultimately reducing farm profitability.”
Keystone Agricultural Producers in Manitoba says the tariffs will hurt farmers on both sides of the border. And the Canadian Federation of Agriculture calls tariffs “bad business.”
The Canadian Federation of Independent Business wants Parliament recalled ensuring support is in place for businesses.
“The federal government should recall Parliament immediately to ensure that Canadian businesses have the support they need and that every dollar Canada collects in tariffs is returned to affected businesses as quickly as possible,” the organization said.
China has also launched counter tariffs against the U.S.
Chicken, wheat, corn, and cotton will face 15 percent tariffs. And soybeans, beef, pork, sorghum and other ag products will have 10 percent tariffs, all beginning March 10, the Customs Tariff Commission of the State Council said.
Mexico is scheduled to announce its tariff response against America on Sunday.
Prior to the tariffs coming into effect, Farms.com spoke with University of Arizona Ag Economist George Frisvold about what tariffs are, who pays them, and where that money goes.