The speculation whether the Trump administration would impose tariffs is over. With an executive order declaring a national emergency related to fentanyl and immigration, President Trump used his authority under executive order to impose a general tariff of 25% on all imports from Canada and Mexico, with a decreased tariff of 10% on certain energy resources from Canada. An additional 10% tariff on existing imports from China rounds out the executive orders signed on Saturday. These tariffs become effective on February 4th.
In response to the imposition of U.S. tariffs, the Canadian federal government released a tranche of initial counter tariffs on U.S. imports at the rate of 25%. These initial tariffs cover CAD $30 billion in U.S. products that include a slew of agricultural commodities, tires for agriculture machinery, lawnmowers and other tractor mounted mowers. Canada has signaled they will impose an additional 25% tariff on CAD $125 billion of U.S. imports after 21 days from the initial counter tariffs. More information about Canadian tariffs can be found here.
Mexico and China have not released information on their counter tariffs yet, but it is heavily assumed they will target U.S. agricultural commodities.
Effective Date of Tariffs
Tariff enforcement will begin on February 4th. For all products entering the country on or after that date, the 25% tariff will be imposed. For all products already in the U.S. before that date, the tariff will not be imposed, even for goods with accounts payable still outstanding. For clarity on future price increases, we advise contacting your OEM to discuss details.
Next Steps
This week, NAEDA will be advancing letters to the White House and Congress urging exclusion of agricultural machinery from existing and future tariffs. NAEDA will be working with stakeholders across North America to convince leaders that the interests of food security combined with current market realities requires exempting agricultural equipment from the escalation of tariffs.
NAEDA will continue to monitor the situation for exemption and exclusion processes in both the U.S. and Canada and will keep dealers updated as the situation evolves. Please contact your association offices with any questions or concerns you have.
