President Donald Trump announced sweeping duties on Canada, Mexico and China over the weekend, triggering a trade conflict with the U.S.’ largest agricultural trading partners.
Imports from Canada and Mexico will be subject to additional 25% duties from Tuesday. Canadian energy exports will face a reduced rate of 10%. All Chinese products will also face a new 10% duty starting the same day.
Take note: Canada swiftly slapped back, unveiling new duties set to phase in over the coming weeks. Among the U.S. exports hit with new 25% duties are orange juice, peanut butter, fruits, vegetables, pork, beef and dairy products. Mexico is slated to unveil its retaliation plans today. China says it will challenge the new tariffs at the World Trade Organization.
Why it matters: Senior vice president at the Association of Equipment Manufacturers, Kip Eideberg, told Agri-Pulse Sunday that the conflict presents a “double whammy” of costs for U.S. farmers. The retaliatory tariffs will likely dent exports, while farm inputs like fertilizer and agriculture equipment become more expensive.
“It's real bad news for farmers and ranchers,” Eideberg said. Eideberg pointed out that it’s common for tractor and combine parts to cross the U.S., Mexico and Canadian borders multiple times in the manufacturing process. New duties would impose added costs at each stage of that process.
Take note: In a Truth Social post Sunday, Trump seemingly acknowledged the measures would lead to higher costs.
“WILL THERE BE SOME PAIN? YES, MAYBE,” he wrote, but added it “WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”
By the way: House Ag Chairman Glenn “GT” Thompson, R-Pa., quickly endorsed Trump’s tariff announcement on Saturday. Senate Ag Chairman John Boozman, R-Ark., still hadn’t commented as of Sunday.
Senate Finance sets meeting on RFK nomination
The Senate Finance Committee will meet Tuesday to consider Robert F. Kennedy Jr.’s nomination to lead the Department of Health and Human Services. The vote follows Kennedy’s two shaky performances on Capitol Hill last week. It’s unclear whether he’s got the votes for confirmation.
We’re watching: Finance Committee member Sen. Bill Cassidy, a doctor and Louisiana Republican who chairs the Senate Health, Education, Labor and Pensions Committee. Cassidy pressed Kennedy at a HELP hearing last week on his views on vaccine safety.
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By the way: The Senate Ag Committee will meet this evening to vote on the nomination of Brooke Rollins to be agriculture secretary.
For more on what’s ahead in the D.C. this week, read our Washington Week Ahead.
Rubio to Panama: Trump has determined canal neutrality treaty violated
Secretary of State Marco Rubio told Panama’s president that Trump has deemed China poses a threat to the Panama Canal’s neutrality, in violation of a U.S.-Panama treaty.
State Department spokesperson Tammy Bruce said that Rubio met with Panamanian President José Raúl Mulino and Foreign Minister Javier Martínez-Acha on Sunday. Rubio informed both that Trump has determined Chinese positions in and around the canal are “unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the Treaty.”
Remember: Under the terms of a 1977 treaty, the U.S. can use military force to protect the canal from any threat to its neutrality. Trump and other Republicans have argued Chinese involvement in infrastructure projects in and around the canal constitute a threat.
In a hearing last week, a legal analyst told lawmakers that the U.S. is free to determine what constitutes a threat and violation of the treaty, without any third-party verification.
OMB funding ‘pause’ is itself paused
A second federal judge blocked the Trump administration’s attempt to stop disbursing grants and loans.
John J. McConnell Jr., chief judge of the U.S. district court in Rhode Island, issued a temporary restraining order Friday against Trump and several agencies, including the Office of Management and Budget. At issue is a memo, later rescinded, from OMB placing a temporary pause on disbursements.
“Congress appropriated many of these funds, and the executive’s refusal to disburse them is contrary to congressional intent and directive and thus arbitrary and capricious,” McConnell wrote in his TRO.
The judge said the action had “unilaterally suspend[ed] the payment of federal funds to the states and others simply by choosing to do so, no matter the authorizing or appropriating statute, the regulatory regime, or the terms of the grant itself,” McConnell said in his order. “The executive cites no legal authority allowing it to do so; indeed, no federal law would authorize the executive’s unilateral action here.”
Take note: A hearing is scheduled today before a different federal judge in Washington, D.C., who already stayed part of the administration’s freeze last week.
45Z notice published in Internal Revenue Bulletin
The Biden administration notice including preliminary guidance on 45Z was published in the Internal Revenue Bulletin, which may give more direction to clean fuel producers hoping to claim the credit.
Biden’s Treasury Department issued a notice on the 45Z tax credit shortly before the end of the administration. However, since it wasn’t immediately published in the bulletin, companies and investors were unsure how much authority the notice had.
Now, clean fuel producers have more solid federal tax guidance available to take to investors and describe with more clarity their ability to claim the credit, said Tim Urban, a senior principal at the Bracewell law firm.
U.S. cattle numbers down slightly in 2025, report says
The nation’s cattle herd now contains 86.7 million adults and calves, a 1% dip from last year’s total, according to a survey from the National Agricultural Statistics Service.
Beef cow inventories dipped 1% to 27.9 million head. Milk cow numbers, however, increased to 9.35 million head, or by less than 1%.
Take note: A separate NASS survey found the nation’s inventory of sheep and lambs had risen by less than 1% to 5.05 million.
Final word
“These tariffs will only make it harder for American families to put food on the table and for American farmers and ranchers to sell their products.” – Minnesota Sen. Amy Klobuchar, ranking Democrat on the Senate Ag Committee.
“President Trump’s tariff policy has been an effective tool in leveling the global playing field and ensuring fair trade for American producers.” – House Ag Chair Glenn “GT” Thompson, R-Pa.