President-elect Donald Trump recently announced plans to impose tariffs on agricultural products from Mexico and Canada. Together, Mexico and Canada exported nearly USD 86 billion worth of goods to the US last year, according to the US Department of Agriculture and US Customs data.
If implemented, the plan could drive up prices for various items in the US market and cause shortages on store shelves.
Trump’s plan could also slow the migration of over 1 million cows exported annually from Mexico to the US, which contribute to the American beef supply, according to a Reuters report.
US producers have reduced their cattle herds in recent years, driving up beef prices. They could benefit if tariffs lead to fewer imports of cattle and beef, the report says.
Tariffs could also further increase meat prices for US consumers, although importers and meat processors might absorb some of the additional costs.
To the north, tariffs could disrupt shipments of beef, dairy cattle, and hogs between the US and Canada, potentially affecting producers in both countries.
The province of Manitoba, for example, sends about 3 million piglets annually to producers in Iowa, Minnesota, South Dakota, and Nebraska, where feed corn is cheaper.
Midwestern farmers raise and fatten the animals in their feedlots before sending them to slaughter, with pork then distributed to buyers in both the US and Canada after processing.
Recent USDA projections show that by 2025, the US is likely to run an agricultural trade deficit exceeding $42 billion.
The threat of tariffs could serve as leverage over Mexico and Canada ahead of the renegotiation of the USMCA trade deal (the new NAFTA), scheduled for review in 2026.
However, the implementation of steep tariffs over time could make the US seem like an unreliable trading partner, prompting importers of American goods to seek alternatives to fill the gap, Reuters said.