EDIT: Since the following article was published earlier this morning, the White House announced that tariffs on Mexico would be suspended for a month.
The deadline came and went, and the United States has placed tariffs on some of our closest trading partners and largest customers. Twenty-five percent tariffs were announced on Canada and Mexico, and a ten percent tariff was placed on China. Further promises of similar tariffs against the European Union are coming on March 1st.
In a statement, the White House said, “The extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency under the International Emergency Economic Powers Act (IEEPA).
“President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.
“Previous Administrations failed to fully leverage America’s economic position as a tool to secure our borders against illegal migration and combat the scourge of fentanyl, preferring to let problems fester. Access to the American market is a privilege. The United States has one of the most open economies in the world and the lowest average tariff rates in the world. While trade accounts for 67% of Canada’s GDP, 73% of Mexico’s GDP, and 37% of China’s GDP, it accounts for only 24% of U.S. GDP. However, in 2023 the U.S. trade deficit in goods was the world’s largest at over $1 trillion.”
Canada and Mexico have already ordered retaliatory tariffs on the United States, hitting us where we long knew they would, in food production. Canada placed 25% tariffs on alcohol and fruit, while Mexico ordered retaliation without sharing its targets, though they had earlier suggested agricultural products. China has said it will look into its response, including filing suit with the World Trade Organization.
This has also garnered responses from Senate Democratic Leader Chuck Schumer saying that these tariffs will do more to raise the prices of groceries and other daily needs rather than lowering them as the President had promised on the campaign trail. The results are yet to be seen, but the markets are watching the developments closely.
Closer to home, what does this mean for things farmers need, like fertilizers? Josh Linville is Vice President of Fertilizer with StoneX, and he spoke just before the tariffs were officially implemented. He talks about industry concerns.
Linville says that simply put, these tariffs are going to affect the fertilizer products we get from these trading partners.
Linville says that the timing couldn’t have been any worse for farmers.
These are just the opening salvos in Trade War 2. We will have to see how other countries react as they have had time to plan their reactions.
