US consumers to pay more? Donald Trump's tariffs on Canada could drive up food and grocery prices
- Trump imposed a 25% tariff on goods from Mexico and Canada, major agricultural suppliers. While tariffs on Mexico are paused for negotiations, those on Canada remain. Canada's retaliatory move is expected to affect US food prices due to the significant agricultural imports from the country.
US President Donald Trump on February 1 imposed a 25% tariff on goods from Mexico and Canada, two of the country’s largest suppliers of agricultural products. The tariffs, covering a wide range of goods, are expected to have a significant impact on food prices in the United States.
While Trump and Mexican President Claudia Sheinbaum agreed to pause tariffs on Mexico for one month to allow for negotiations, the tariffs on Canada remain unchanged. Canada has announced retaliatory tariffs, intensifying trade tensions.
Canada and Mexico hit back
Canadian Prime Minister Justin Trudeau announced a 25% counter-tariff on $107 billion worth of American products in response to Trump’s decision.
Mexican President Claudia Sheinbaum had instructed her economy minister to develop a strategy to counter the US tariffs, signaling potential retaliation if negotiations failed. However, with high-level talks now set to take place, any immediate impact on food prices from Mexico is on hold.
Impact on key food categories
Mexico and Canada play a vital role in the US food supply chain, providing a significant share of several key food categories. Mexico is the largest supplier of fruits and vegetables to the US, while Canada is a leading exporter of grain, livestock, meats, and poultry.
Top agricultural exports to the US
Here are the key agricultural exports from Mexico and Canada to the US:
Fruits: Mexico - $10.8 Billion
Vegetables: Mexico - $9.6 Billion, Canada - $5 Billion
Grains: Canada - $8.6 Billion, Mexico - $3 Billion
Livestock and Meats: Canada - $6.4 Billion, Mexico - $3.4 Billion
Sugar, Teas, Spices, and Fibers: Canada - $4.5 Billion, Mexico - $3.9 Billion
Tree Nuts: Mexico - $517 Million, Canada - $73 Million
Dairy: Canada - $500 Million
Poultry: Canada - $692 Million, Mexico - $29 Million
Total value of imports to the US
Mexico, China, and Canada are the top three countries exporting goods to the US. In 2024, Mexico was the US's largest trade partner, followed by China and Canada. Combined, Canada and Mexico made up 28.2% of total US imports.
In 2024, the total value of US imports from these countries was:
Mexico: $466.6 Billion
China: $401.4 Billion
Canada: $377.2 Billion
Source: US Department of Agriculture, US Census Bureau (as reported by CNN).
Stay updated with the latest developments on India Pakistan and Operation Sindoor . Get breaking news and key updates here on Mint!