New U.S. tariffs on imports from Mexico and Canada took effect on Tuesday, just hours after President Donald Trump signed an executive order to raise duties on China – his second such tariff hike since taking office.
Trump signed executive orders last month noting that the flow of illegal drugs arriving from Mexico and Canada constituted a national emergency. Accordingly, the orders imposed new 25% duties on both countries’ exports, with Canadian energy products subject to a lower 10%, until the crisis is addressed. Both governments negotiated a 30-day reprieve, however, which expired on Monday.
Similarly, Trump signed an executive order imposing a new 10% duty on Chinese imports on Feb. 1. On Monday, he raised that rate to 20%, citing Beijing’s failure to make progress curbing fentanyl production and shipments to the U.S.
Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum have had plenty of time to plan their retaliation. As soon as the U.S. tariffs went into effect, Canada retaliated with its own 25% duties on some $20 billion (C$30 billion) of U.S. goods, including certain tomatoes and other fruits, out-of-quota dairy products and certain prepared foods. After Twenty-one days, a further $86 billion (C$125 billion) of U.S. exports are set to face new duties.
“[W]e are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said in the statement.
Some of Canada’s regional leaders have floated even more extreme responses.
“If they want to try to annihilate Ontario, I will do anything — including cutting off their energy — with a smile on my face," Ontario Premier Doug Ford said in a recent news conference.
Sheinbaum said in a press conference Monday that she would unveil her government's retaliation on Tuesday, after any U.S. tariffs have gone into effect.
Following Trump's first tariff hike on imports from China, Beijing retaliated with new duties on U.S. agricultural machinery exports, among other products. Chinese state media outlet the Global Times reported that U.S. agriculture and food products would likely be among the products targeted for retaliation this time around.
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Canadian and Mexican officials had mounted an intense pressure campaign in recent weeks to avoid the new duties, meeting with senior trade officials in the Trump administration. But on Monday Trump told reporters there was no way for either government to stave off the new tariffs.
“No room left for Mexico or for Canada. No. The tariffs you know, they're all set. They go into effect tomorrow,” Trump said.
However, Trump made similar comments in the lead-up to Feb. 4 – the initial deadline for the new tariffs, only to later delay them.
Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent had also provided some hope for both governments in recent days. On Sunday, Lutnick suggested that the final tariff rates were still under discussion. Bessent had also called on Canada and Mexico to match U.S. tariffs on China.
U.S. farm equipment manufacturers have previously warned that increasing duties on U.S. trading partners would raise input costs that could be passed along to U.S. farmers and ranchers. Components and parts cross the U.S. border multiple times before assembly into the finished product, and will face higher added costs each time they re-enter the U.S.
“Tariffs are taxes on American companies,” Kip Eideberg, senior vice president at the Association of Equipment Manufacturers, told Agri-Pulse in a text on Monday. “Tariffs have already contributed to higher input prices, disrupted supply chains and created uncertainty for equipment manufacturers.”
While the group supports efforts to create more favorable terms for U.S. trade, Eideberg said the duties threaten U.S. market expansion and undermine its global competitiveness, given competitors from other nations are not subject to the same tariffs.
Farm groups, including the American Farm Bureau Federation and the National Farmers Union, had been urging the administration to reconsider the Mexico and Canada tariffs. Canada is the main source of potash for U.S. producers, and lawmakers have warned of rising input costs, particularly fertilizer, given the U.S.’ reliance on Canadian potash.
As soon as the tariffs went into effect after midnight, AFBF issued a statement urging a swift resolution to the issue.
Ryan LeGrand, president and CEO of the U.S. Grains Council, told Agri-Pulse on Monday that he is also concerned about U.S. producers losing their footing in the Mexican market should the Mexican government hit agriculture imports with retaliatory tariffs.
“Brazil and Argentina will start to ship more corn to Mexico if they were to put a tariff on our corn,” LeGrand said. “The thought is we would lose market share. That's a potential outcome of this.”
Sen. John Hoeven, R-N.D., stressed to Agri-Pulse that the president’s long-term objective is to secure more favorable market access for U.S. exports.
“The plan is to get better terms for exporters,” he said. Agriculture Secretary Brooke Rollins has pledged to help farmers with export losses stemming from tariff retaliation, he noted. “In the short run, there's concerns, but the long-run goal is to get better access to markets.”
On Monday, however, Trump warned U.S. ag producers to brace for further trade turbulence with an optimistic message.
“To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States,” he wrote in a Truth Social post. “Tariffs will go on external product on April 2nd. Have fun!”
A White House official told Agri-Pulse that the post referred to the reciprocal tariffs that Trump and other officials have said could be ready by April 2. Those new duties would apply to countries that maintain tariff rates on U.S. exports higher than the U.S.’
The message elicited caution from some, including House Agriculture Committee Chair Glenn "GT" Thompson, R-Pa.
"I encourage that," Thompson told Agri-Pulse, but stressed that "we do need foreign markets." Thompson said that the administration should learn from recent history. After the 2008 global financial crisis, he said, the U.S. agriculture industry fared better than most because of robust export markets.
Senate Agriculture Committee Democrat Adam Schiff of California also questioned Trump's turn of phrase.
“This is fun for whom exactly?” Schiff wrote in a post on X. “The farmers I’ve spoken with still haven’t recovered the market share they lost the last time Trump imposed tariffs — over four years ago. This time, they’ll hurt even more. Much more.”
Rebekah Alvey contributed to this report.
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