Mexico Tariffs Delayed; Higher Duties Set on Brazil, Canada

By Ryan Hanrahan

Reuters’ David Lawder, Trevor Hunnicutt, and Aida Pelaez-fernandez reported that “U.S. President Donald Trump imposed steep tariffs on exports from dozens of trading partners, including Canada, Brazil, India, and Taiwan, ahead of a Friday trade deal deadline, pressing ahead with plans to reorder the global economy. Trump set rates including a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan, and 39% for Switzerland, according to a presidential executive order.”

“The order listed higher import duty rates of 10%–41% starting in seven days for 69 trading partners,” Lawder, Hunnicutt, and Pelaez-fernandez reported. “Goods from all other countries not listed would face a 10% U.S. import tax. Trump had previously said that rate might be higher. The administration also teased that more trade deals were in the pipeline as it seeks to close trade deficits and boost domestic factories.”

Brownfield’s Carah Hart reported that “some countries have already made a (trade) deal with the U.S., including the United Kingdom, European Union, Japan, the Philippines, China, Vietnam, Indonesia, and South Korea. Faith Parum, an economist with the American Farm Bureau Federation, says few details are known about what the deals mean for U.S. agriculture.”

“‘I think we’ll continue to get more and more details about how the two countries that agree to something will implement it. Historically, trade deals have taken a long time, because they’re very detail oriented,” Parum said, according to Hart’s reporting.

Canada Tariffs Increased to 35%

Axios’ Ben Berkowitz reported that “Trump raised duties on Canada to 35% from 25%, citing dissatisfaction over Canadian efforts to stop the flow of drugs across the border. However, goods covered by the existing USMCA trade agreement remain exempt, as they were before.”

“Canadian Prime Minister Mark Carney said Wednesday he had expected trade talks to continue beyond the deadline, but his pledge to recognize Palestinian statehood prompted Trump to say it ‘will make it very hard for us to make a Trade Deal’ with the North American neighbor,” Axios’ Rebecca Falconer reported. “The reason a White House fact sheet gave on the tariffs was the Trump administration’s belief that Canadian officials had ‘failed to cooperate in curbing’ the flow of drugs into the U.S. from the border.”

Some Fertilizer, Ag Products Exempt from Brazil Tariffs

Reuters’ Brendan O’Boyle reported that “U.S. President Donald Trump signed an executive order on Wednesday imposing a 40% tariff on Brazilian exports, bringing the country’s total tariff amount to 50%. Some of Brazil’s major exports, however, were exempted from the tax.”

“Notable exemptions include products already covered by other specific tariffs, like passenger vehicles, iron and steel products, and a large number of parts and components used in civil aircraft,” O’Boyle reported. Also exempt, according to O’Boyle’s reporting, are “various mineral or chemical fertilizers,” “Brazil nuts,” and “Orange juice (frozen and not frozen) and orange pulp.”

Valor International’s Rafael Walendorff reported — before the exemptions were announced — that “the Brazilian Confederation of Agriculture and Livestock (CNA) estimates that 50% tariffs imposed by the United States on Brazilian agricultural goods starting in August could slash the value of U.S. imports from Brazil by 48%, leading to an annual revenue loss of $5.8 billion for Brazilian exporters.”

“The projection is based on $12.1 billion in Brazilian agribusiness exports to the U.S. in 2024 and on the price elasticity of U.S. imports, which measures how import volumes respond to price changes,” Walendorff reported.

Some Mexico Tariffs Delayed

Reuters reported that “U.S. President Donald Trump said on Thursday he had agreed with Mexican President Claudia Sheinbaum to extend an existing trade deal with Mexico for 90 days and continue talks over that period with the goal of signing a new deal.”

“The extension for Mexico avoids a 30% tariff on most Mexican non-automotive and non-metal goods compliant with the U.S.-Mexico-Canada Agreement on trade and came after a Thursday call between Trump and Mexican President Claudia Sheinbaum,” Lawder, Hunnicutt and Pelaez-fernandez reported. “‘We avoided the tariff increase announced for tomorrow,’ Sheinbaum wrote on X, saying the Trump call was ‘very good.’”

“About 85% of U.S. imports from Mexico comply with the rules of origin outlined in the USMCA, shielding them from 25% tariffs related to fentanyl, according to Mexico’s economy ministry,” Lawder, Hunnicutt and Pelaez-fernandez reported. “Trump said the U.S. would continue to levy a 50% tariff on Mexican steel, aluminum and copper and a 25% tariff on Mexican autos and on non-USMCA-compliant goods subject to tariffs related to the U.S. fentanyl crisis.”

Mexico Tariffs Delayed, Higher Duties Set on Brazil & Canada was originally published by Farmdoc.