President Donald Trump and Mexican President Claudia Sheinbaum on Feb.3 said the U.S. will pause tariffs for one month following an agreement for 10,000 Mexican National Guard troops deploying to the border.
(Editor’s note: Shortly before WLJ press time, Trump also delayed tariffs on Canada by 30 days.)
Trump, on social media, posted he had spoken to Sheinbaum and agreed to delay tariffs. “It was a very friendly conversation wherein she agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States. These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our Country. We further agreed to immediately pause the anticipated tariffs for a one-month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico. I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries.”
Sheinbaum’s comments, posted on X, also reiterated the same message. “We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements: 1. Mexico will immediately reinforce the northern border with 10,000 members of the National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl. 2. The United States is committed to working to prevent the trafficking of high-powered weapons to Mexico. 3. Our teams will begin working today on two fronts: security and trade. 4. They are pausing tariffs for one month from now.”
Mexico is the largest U.S. market for agricultural products right now at nearly $30 billion expected for 2024. Mexico is the top market for U.S. corn, pork, poultry, dairy and wheat products.
The move reflects how Trump uses the threat of tariffs to extract concessions from other countries. A similar move happened over the past couple of weeks with Colombia over accepting migrants from the U.S.
Canadian tariffs
Meanwhile, Canada on Feb. 2 posted a list of U.S. products that would be subject to tariffs as early as Feb. 4. The list of $30 billion in U.S. products facing retaliatory tariffs from Canada includes a long list of food and agricultural products.
The Canadian government released a list of products to be subject to tariffs in retaliation for Trump’s announced 25% tariffs on all Canadian products except energy, which will be subject to 10% tariffs.
Commodity markets and stock markets each opened down in early trading Monday in reaction to the tariff announcements over the weekend.
The Canadian list includes all kinds of agriculture products including poultry, pork, dairy, wheat, barley, rye, oats, rice, sunflowers, canola, sugar products, chocolates, pasta, fruits, vegetables, pasta, soups, wine, beer, distilled liquors, tobacco and wood products. Also included were animal feed supplements and harvesting equipment.
The list did not include beef, which is an $824 million market. Also not on the list were corn or soybeans, but the U.S. exports only small volumes of those commodities to Canada.
U.S. baked goods, fresh vegetables, fruit, ethanol, processed food, dairy products and pet food are all billion-dollar export products to Canada, USDA data highlights. Canada is the largest export market for U.S. baked goods at $2.8 billion in sales in 2023. Canada also was the top market for U.S. vegetables at $1.97 billion. Canada accounts for nearly $800 million in pork imports and $500 million in poultry imports from the U.S. as well.
The Canadian announcement said, “These countermeasures are effective immediately and will remain in place until the U.S. eliminates its tariffs against Canada. Canada’s countermeasures do not apply to U.S. goods that are in transit to Canada on the day on which they come into force.”
The Canadian government also said in a news release it “intends to impose tariffs on an additional list of imported U.S. products, worth $125 billion. This second list will be made available in the coming days, for a 21-day public comment period prior to implementation. It will include products such as passenger vehicles, trucks and buses, steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy products, and more.”
Canadian Minister of Finance and Intergovernmental Affairs Dominic LeBlanc said, “Canada and the U.S. are more than just trading partners. We are highly integrated economies—and this has greatly benefitted both of our countries, for more than 150 years. We want to preserve this relationship, but in the face of the unjustified U.S. tariffs against Canadian goods, we are taking action to protect our economy, our workers and our businesses. We will always stand for Canada.”
Doug Ford, the premier of Ontario, announced that the Liquor Control Board of Ontario (LCBO) will pull all American products from its shelves starting Feb. 4. Ford said on X the LCBO sells nearly $1 billion in American alcohol products. “Not anymore.”
Also on Feb. 2, The Fertilizer Institute (TFI) wrote Trump urging an exemption on tariffs for Canadian potash and other fertilizers “especially as we approach the critical time of spring planting where nutrient delivery and application are essential for the harvests that fill American’s dinner tables with abundant and affordable food.”
TFI noted, “The U.S. relies on imports for over 95% of its potash fertilizer needs, with nearly 90% of that coming from Canada. Canada also supplies U.S. growers with over 8% of our nitrogen fertilizer needs, accounting for 25% of U.S. nitrogen fertilizer imports.”
Weekend orders
Trump signed three executive orders Saturday imposing 25% tariffs on Canada and Mexico and 10% tariffs on China. Petroleum imports from Canada will face a 10% tariff. The tariffs went into effect Feb. 4. Trump stated the increase in “illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency under the International Emergency Economic Powers Act (IEEPA).”
On social media Sunday morning, Trump said “Canada, Mexico and China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both in regards to TRADE, CRIME AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA.”
Trump added, “MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS!” He stated, “THIS WILL BE THE GOLDEN AGE OF AMERICA. WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!).”
In a separate post, Trump said the U.S. spends billions of dollars to subsidize Canada. “There is no reason. We don’t need anything they have. We have unlimited Energy, should make our own Cars, and we have more Lumber than we can ever use. Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh, but true! Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military production for the people of Canada—AND NO TARIFFS!” — Chris Clayton, DTN ag policy editor and Jerry Hagstrom, DTN political correspondent
