Donald Trump said he plans to use an executive order to levy a 25% tariff on imports from Canada and Mexico on day one in office, potentially upending trade routes for agricultural producers who have worked to increase exports to both countries.
The president-elect posted on Truth Social on Monday about the threat of new tariffs, which a include a promised additional 10% duty on goods from China. The announcements build on the Trump campaign’s promises to impose aggressive tariffs as a way to entice companies to establish production hubs in the U.S.
The moves could put the country back on a path towards the trade war it waged during Trump’s first term, which caused a frenzy of retaliatory tariffs from trading partners that disproportionately affected agricultural products. Mexico has already hinted it would retaliate to U.S. tariffs, with President Claudia Sheinbaum telling reporters “one tariff would be followed by another in response.”
Tariffs would also undermine the United States-Mexico-Canada Agreement, which Trump negotiated during his first term. The 2018 trade deal put a halt to tensions between the North American countries, but the agreement is up for review in 2026.
“If President Trump proceeds with imposing immediate and unilateral tariffs, it could escalate tensions and effectively ‘go nuclear’ on USMCA,” Alberto Villareal, managing director of business consulting firm Nepanoa, wrote in a LinkedIn post Monday. “In response, Mexico and Canada might retaliate with tariffs on U.S. exports before revisiting the agreement.”
Retaliatory tariffs from Mexico, for example, could target U.S. commodities including apples, potatoes, soybeans and wheat, Villareal said. The U.S. has increased food exports to both Canada and Mexico in order to offset lost sales to China, which sharply cut imports following Trump’s tariffs.
New tariffs could further shrink export markets at a time farmers are already experiencing lower demand for their commodities. It could also raise food prices for consumers especially as the U.S. becomes a net-importer of food.
Mexico is the United States’ largest agricultural trading partner in terms of combined exports and imports, with Canada a close second, according to the U.S. Department of Agriculture. In 2023, Mexico accounted for 16.3% of U.S. agricultural exports and 23.3% of U.S. agricultural imports.