A breakdown in trade talks between the US and Canada prompted additional tariffs on billions of dollars of goods and the escalation of tension between the North American countries.<\/p>\n
President Donald Trump initially announced additional 50% tariffs on certain Canadian goods, including dairy, alcohol and motor vehicles, to go into effect Aug. 19, but suspended that order for three days as the countries appeared to reach a deal.<\/p>\n
However, the so-called agreement fell apart, and the tariffs went into effect. Trump previously said the duties are meant to \u201coffset Canada\u2019s discriminatory treatment of US exports.\u201d<\/p>\n
\u201cCanada wants the benefits of being a State, without being one!!! They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!\u201d Trump said on social media following the negotiation breakdown.<\/p>\n
The Canadian government quickly announced retaliatory tariffs ranging from 15% to 50% on hundreds of US products totaling $27.6 billion, including dairy, fish and aquaculture, lumber, steel, aluminum and some harvesting machinery. Those tariffs are planned to go into effect Sept. 8.<\/p>\n
\u201cIn short, they asked too much and they offered too little,\u201d Canadian Prime Minister Mark Carney said of the trade talks with the US. \u201cCanada will match Washington\u2019s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families and businesses. Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, electronics.\u201d<\/p>\n
In response, Trump announced on social media he plans an additional 50% tariff on a range of Canadian goods starting Jan. 1, 2027.<\/p>\n
Canada has been one of the most important trading partners for US agriculture since the countries\u2019 first trade agreement in 1989, American Farm Bureau Federation Zippy Duvall said, urging the two nations to return to the negotiating table.<\/p>\n
\u201cWe are concerned that talks with our northern neighbor around a resolution to Section 338 tariffs have fallen apart in the midst of the (US-Mexico-Canada Agreement) USMCA review,\u201d Duvall said in a statement.<\/p>\n
\u201cOur strong agreements with Canada and Mexico have eliminated nearly all tariffs for US agriculture, allowing the majority of our farm products to enter those markets duty- and quota-free,\u201d Duvall said. \u201cAdditional tariff escalations and subsequent retaliation will hurt US agriculture at a time when farmers and ranchers are already struggling.<\/p>\n
\u201cAgricultural exports are a critical component of farm success. More broadly, they create a positive ripple effect across the economy. That\u2019s why we need a de-escalation of tariffs and a renewal of the USMCA that maintains duty-free market access for US agriculture.\u201d<\/p>\n
In July, the US opted not to extend the USMCA. The move started a clock for the agreement to expire within 10 years but also set the stage for annual reviews. While the US has participated in several formal bilateral negotiations with Mexico, no such meetings had been scheduled with Canada.<\/p>\n
As for Canada\u2019s retaliatory tariffs, the country placed 25% tariffs on cheese and curd products, amounting to $135 million in US exports last year, according to USDA. Canada also placed 50% tariffs on a range of whey products, which accounted for $82.6 million in US dairy exports last year. Milk and cream, which make up a small piece of US exports, also were hit with a 50% tariff.<\/p>\n
US dairy exports to Canada last year topped $1.3 billion.<\/p>\n
DTN reported another key agricultural area hit by the Canadian tariffs is wood products, which amounted to $1.97 billion in US exports last year. Plywood products will face a 50% tariff while other wood products face a 25% tariff.<\/p>\n
The Canadian tariff list also includes 25% duties on certain harvesting machinery, including balers and lawnmowers, while parts for such equipment would face a 15% tariff. Livestock trailers, along with other semi-trailers from the US, would see a 25% tariff.<\/p>\n
American iron, steel and aluminum products will face 50% tariffs. The tariffs include more than 380 steel products, 280 iron products and more than 50 aluminum products.<\/p>\n