On Feb. 1, President Donald Trump signed three executive orders imposing new tariffs on goods from Mexico, Canada and China.
All imports from Mexico and Canada will have a 25% tariff applied, except for Canadian energy, which will have a 10% tariff. Products from China will have a 10% tariff in addition to any preexisting tariffs.
Tariffs are paid by the parties who import the products, but retaliatory measures are likely to affect U.S. exports.
The tariffs were set to begin Tuesday, Feb. 4, yet after discussions with Mexican President Claudia Sheinbaum, who promised to send 10,000 soldiers to the border to prevent drug trafficking, Trump paused the tariffs on goods from Mexico for one month.
Canadian Prime Minister Justin Trudeau responded by implementing a 25% tariff on hundreds of U.S. goods, including meat and dairy products. These were also set to take effect on Feb. 4, with more tariffs potentially on the horizon. However, this afternoon, Trump and Trudeau reached an agreement on a $1.3 billion border plan to stop the flow of fentanyl, which paused the tariffs for 30 days.
China intends to challenge the tariffs at the World Trade Organization. Trump is also expected to talk with Chinese leaders and yet another deal could be reached.
Mexico, Canada and China are the three biggest markets for U.S. agricultural commodities. According to the U.S. Dairy Export Council (USDEC), they collectively account for over half of U.S. dairy exports by value each year.
Last week, the Ohio Ag Law Blog projected this scenario could amount to over $1.5 billion in dairy export losses and a total amount of $36.9 billion in losses to American agriculture.
Already, the announcement triggered market volatility resulting in lower U.S. grain and dairy prices.
Dairy leaders in the U.S. and Canada have expressed concerns for the impact this will have on their dairy farmers.
USDEC President and CEO Krysta Harden, said, “The White House cited the ongoing flow of illicit drugs into the United States as the primary reason behind the imposition of tariffs. While this legitimate concern needs to be swiftly addressed, we urge discussions between all countries involved to resolve the issues in a manner that preserves the livelihoods of dairy farmers and manufacturers in rural America.”
David Wiens, president of Dairy Farmers of Canada, said, “Like all Canadians, our nation’s dairy farmers are deeply concerned about the far-reaching impacts that the high tariffs imposed by the United States on Canadian products will have on consumers, industries and economies on both sides of the border. We stand with our federal government and all parties, showing determination and commitment to swiftly resolving this impasse.”
As published at 4:30 p.m. CST, Feb. 3, 2025.
