US President Donald Trump has agreed to hold off imposing 25% tariffs on Canada and Mexico for 30 days, pulling the region back from the brink of a potentially damaging trade war, the BBC reported.
Trump agreed to pause the threat of tariffs on Canada and Mexico after reaching a deal over migrants and drugs crossing borders with the two countries, the Metro reported on 5 February. In return the USA said it would limit the flow of guns into Mexico.
However, an additional 10% tariff on Chinese imports came into effect on 4 February.
In response, Beijing announced it would be imposing retaliatory tariffs on a range of US products, including 15% on coal and liquified natural gas and 10% on crude oil and agricultural machinery, the BBC wrote.
However, the measures were not set to come into effect until 10 February, which would “give China the option to back down” financial firm Capital Economics was quoted as saying in the Metro report.
Despite welcoming the delay in tariffs, the premier of Ontario – Canada’s most populous province, which makes up about 38% of the country’s GDP – Doug Ford wrote on social media platform X: “Make no mistake, Canada and Ontario continue to stare down the threat of tariffs.
“Whether it's tomorrow, in a month or a year from now... President Trump will continue to use the threat of tariffs to get what he wants.”
The Canola Council of Canada (CCC) had said in a statement on 1 February that tariffs would have had a devastating effect on the country’s canola sector.
The USA is Canada’s leading market for canola exports and a market that is well integrated with the Canadian canola industry, according to the CCC.
The total export value of Canadian canola products to the USA in 2023 was C$8.6bn (US$5.8bn), including almost 3M tonnes of canola oil valued at C$6.3bn (US$4.3bn) and more than 3.5M tonnes of canola meal valued at C$2bn (US1.4bn).
In addition, canola is the single largest contributor to farm crop cash receipts in Canada – grown by around 40,000 farmers across the country, according to the CCC.
Recent CCC analysis on the impact Canadian-grown canola has on the US economy also highlighted the economic benefits the USA gained from the Canadian canola industry, which averaged US$11.2bn/year and included US$1.2bn in wages.
Economic benefits of the trading relationship could be seen at almost every stage of the canola industry including US-based processing and refining, transportation, bottling and packing, food end uses and livestock, the organisation said.
Argus Media also wrote on 31 January that potential tariffs could lead to disruptions in US corn and soyabean sales to China and Mexico, creating substantial risks for US agriculture markets.
China and Mexico are the two largest purchasers of US corn and soyabeans, collectively accounting for 48% of US corn exports and 61% of US soyabean exports since 2019, according to US Department of Agriculture (USDA) data.
Mexico is the second largest whole soyabean market for the USA, as well as a major market for soyabean meal and oil, according to the US Soybean Export Council (USSEC).
In 2018, during Trump’s first term as president, similar tariffs placed on China led to counter-tariffs on US agricultural exports and a substantial reduction in trade, with US exports of corn and soyabeans to China dropping by 74% that year compared to the previous year, according to USDA data.
Trump has also threatened to introduce tariffs on other economies, including the European Union and BRICS member countries (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates), global law firm White & Case wrote on 2 February.
Economists have warned that the introduction of the import taxes by the USA, and the responses from other countries, could lead to prices rising on a wide range of products, the BBC report said.
