By the time you read this, President Donald Trump might have decided whether to impose a 25% tariff on all imports from Canada and Mexico. Trump signaled his intent on Feb. 1 to impose the tariffs. But he delayed their implementation a few days later for 30 days after Canada and Mexico retaliated by imposing tariffs on a wide range of U.S. goods entering the two countries. These were then delayed as well. Trump however went ahead with 10% additional tariffs on imports from China. The new tariffs on China took effect on Feb. 4.
Canada initially imposed tariffs on $30 billion of American goods, followed by $125 billion worth of other American products later on. Its tariffs provided insight into what Canada might still target. Its list included meat, poultry, eggs, dairy products, dairy ingredients, honey, tomatoes, legumes, nuts, fruit, coffee, tea, spices, grain-based commodities like wheat, rye, barley, oats, canola and rice, margarine, processed meats, sugar, molasses, chocolate, malt extract and sauces. The Mexican government did not provide a specific list of U.S. products subject to tariffs, but its plan included a focus on U.S. goods from “Republican strongholds.”
Industry groups in the U.S., Canada and Mexico used the delay to redouble their efforts to urge Trump not to proceed with tariffs. The U.S. Meat Export Federation said it strongly supported ratification of the U.S.-Mexico-Canada Agreement, and it would like to see all parties honor the terms of that agreement. It is hopeful that talks between Trump, President Claudia Sheinbaum and Prime Minister Justin Trudeau and their advisers will lead to resumption of tariff-free red meat trade, it said.
The Meat Institute said it heard from several members about concerns regarding tariffs on live cattle and hog imports in particular. The Canadian Meat Council said cross-border trade in the North American meat industry exceeds $16 billion CAD annually. It urged government officials to prioritize dialogue and seek a balanced solution that preserves the benefits of the deeply integrated supply chains. At stake are thousands of jobs, billions in economic activity, and the competitiveness of the North American meat sector on the global stage, it said.
Tyson Foods on Feb. 3 downplayed the prospect of tariffs on a call with analysts. One analyst noted that approximately 10% of every hog in the U.S. is sent to Mexico. Tyson’s teams continuously engage in contingency planning to minimize business disruption from trade or supply chain changes, said President and CEO Donnie King. As it has done in the past, it will leverage its global expertise to identify the best markets for its products amid evolving conditions. It has chicken leg quarters going into Mexico, which is a large trading partner for Tyson. What Tyson would do, whether it be pork or chicken, is to find other markets, he said.
King later told Yahoo Finance that the company does not expect to see a significant impact from tariffs and had planned for tariffs within its annual adjusted operating income forecast. Tyson has planned for tariffs, for immigration and any market dynamics, and have baked that into its guidance for the balance of the year, King told Yahoo Finance. Tyson’s teams have engaged in contingency planning to minimize disruptions or impacts to the supply chain for some time. There will be short-term disruptions but they will equilibrate. It may need to do some shuffling if Mexico goes through with retaliatory tariffs, said King.
The tariffs, if enacted even at small percentages, could sharply increase costs for American businesses and consumers. They would make U.S. agricultural products, including meat, harder to market abroad, while simultaneously raising costs for farmers, food manufacturers and consumers, say agriculture industry groups. Should Canada, Mexico and China impose retaliatory tariffs on U.S. meat and poultry exports, they could severely damage what is a vital global trade for the industry.
The economic impact of tariffs could be immense, given the highly connected nature of the three North American countries. In fiscal 2024, Mexico became the No. 1 destination for American agricultural exports for the first time ($30 billion). Canada was No. 2 ($29 billion), and China was No. 3 ($25.7 billion). The U.S. in 2023 imported nearly 17 million metric tons (mt) of agricultural goods from Mexico worth $45.5 billion, according to USDA data.
Meanwhile, Mexico last year imported 40.45 million mt of U.S. agricultural goods worth $28.6 billion. Mexico is the No. 1 importer of U.S. corn and corn sweeteners, leaving American corn farmers particularly exposed to retaliatory tariffs. U.S. agricultural imports from Canada in 2023 totaled 23.6 million mt worth $40.1 billion, with top commodities including beef, pork, dairy products, oats and rapeseed oil. — Steve Kay, WLJ columnist
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
