As of February 3, the situation is fluid regarding how the U.S.-imposed tariffs of 25% on Canadian products will play out. In breaking news, today, Mexico achieved a 30-day reprieve on tariffs. A similar breakthrough was announced late afternoon with a 30-day pause for Canada. 

Against this dramatic backdrop, Ron Lemaire, president, Canadian Produce Marketing Association (CPMA) hosted a 30-minute webinar with 300 on the call at 11 am. His guests were Aaron Fowler, associate assistant deputy minister and deputy chief trade commissioner, Global Affairs and Matthew Smith, chief agricultural negotiator and director-general, Agriculture and Agri-Food Canada. 

Questions on the call:

How will the tariffs work? At the time of the call, the industry was waiting for the U.S. Federal Register to post details. The U.S. Customs and Border Protection is anticipated to publish its plans for implementation in the U.S. Federal Register. Only the unofficial version is available at the moment: https://www.federalregister.gov/public-inspection/2025-02291/implementation-of-additional-duties-on-products-of-canada

Will the Canadian government backstop exporters by covering off the tariff fees?

Stay tuned. One caller commented: “I realize importers pay the tariffs, however the reality is that the exporter needs to discount their products by 25% for the importer in the U.S. to remain whole.”

What’s the mood of agricultural organizations in the U.S.? 

Matthew Smith said, “U.S. agricultural businesses are sour on the idea of tariffs but are reticent to bring their concerns forward. They are waiting for the midnight deadline. At the moment, they are hesitating to speak up.”

In addition, Smith said there is a lot of contract law that will be involved. The tariffs will be a big shock to the system. The best advocacy approach now is to have Americans talking to Americans about the impact on their businesses. 

Interestingly, the Canadian Federation of Agriculture had representatives in Texas last week attending the American Farm Bureau (AFB) annual convention. Zippy Duvall, president of the AFB has expressed alarm about potential harm to farmers resulting from the order signed by President Trump imposing stiff tariffs on the United States’ top three agricultural markets by value.

“Farm Bureau members support the goals of security and ensuring fair trade with our North American neighbors and China, but, unfortunately, we know from experience that farmers and rural communities will bear the brunt of retaliation,” he said. “Harmful effects of retaliation to farmers ripple through the rest of the rural economy. In addition, over 80 per cent of the United States’ supply of a key fertilizer ingredient — potash — comes from Canada. Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs.”

The timing of the tariffs, just before orders are finalized in March for spring planting, will put pressure on American farmers who can’t pivot to other fertilizer sources.   

How will Mexican produce be impacted in transit through the U.S. to Canada? 

Matthew Smith said there will be no impact if it is not transformed into another product and is not entering the U.S. commercial stream. The rules of origin apply under the current CUSMA regime. 

How are American retailers responding to the situation? 

Ron Lemaire said that in his dialogue with major U.S. retailers, their stance is to pass along the 25% tariffs to consumers. If they stand strong together, there will be more pressure to dismantle the tariffs. 

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