The official announcement made by President Trump on April 2 was met with a wide level of concern across many industries. Pinion advisors present a look at what was announced and key impacts across the food and agriculture value supply chain.

Import tariffs announced on April 2, 2025:

  • Parameters: There will be a baseline 10 percent tariff imposed on imports from all countries, with a higher tariff on approximately 60 countries with whom the United States believes there is unbalanced trade. The U.S. tariffs against these countries range from 10 to a combined 54-percent tariff placed on China.
  • Effective dates: The 10% baseline tariff takes effect April 5 while the higher tariffs take effect on April 9.

The tariffs announced on April 2 follow several other major tariffs already threatened or imposed including 25% tariffs on imported steel and aluminum and 25% tariffs on imported cars and car parts.

The overall U.S. tariff rate, which was 2.5 percent last year, will soon increase to approximately 22 percent – the highest level since the Great Depression.

No Canada and Mexico Reciprocal Tariffs Imposed

Notably, the United States will not impose reciprocal tariffs on Canada and Mexico at this point, although that could change in the future.

  • Last month, President Trump imposed tariffs on 25 percent of imports from Canada and Mexico, with an exception for goods covered by Trump’s 2019 U.S.-Mexico-Canada Agreement with those nations.
  • Non-USMCA compliant goods from Mexico and Canada are still subject to 25% duties, while energy and potash fertilizer imports are tariffed at 10%. Canada and Mexico are two of the top three markets for American agricultural producers.

Retaliation Announcements from Countries

The levies President Trump announced on U.S. allies and adversaries alike will impact agriculture which will be a target for retaliation by other countries.

China’s reaction: After President Trump’s announcement, China vowed countermeasures to safeguard its own interests. China, along with Canada and Mexico is one of the largest destinations for U.S. agricultural exports and the largest for U.S. soybean exports. The trade war with China during Trump’s first term cost farmers $27 billion in exports.

The European Union’s reaction: The E.U. also announced it was preparing measures to counter the latest U.S. tariffs.

In response to President Trump’s tariffs and tariff threats over the past months, China, the European Union, and Canada developed lists of retaliatory targets that included U.S. agricultural goods.

What’s at Risk?

The stakes are extremely high. U.S. agriculture is dependent on global markets. In 2024, U.S. agricultural exports equaled about $176 billion with approximately 20% of U.S. farm products sold to foreign markets.

  • Most at risk producers: Those that stand to lose the most are producers of the biggest U.S. ag commodities like corn, beef, soy, cotton, rice, pork, and specialty crops, which will be at the top of trading partners’ list of retaliatory actions.
  • Excluded Ag inputs: President Trump’s tariff rollout did include exclusions for some critical agricultural inputs. Products receiving exclusions include some herbicides, pesticides, and fertilizers, as well as component materials like potash, paraquat, and diquat. The administration also exempted vaccines for veterinary medicine, critical for livestock producers.

There is a growing concern that continuing trade disruptions could solidify the view of the U.S. as an unreliable supplier of food and agricultural products. Competitor nations are actively working on trade agreements without the U.S. Markets that took decades to cultivate could be lost.

What actions should your business take?

“With the array of products and industries which will be impacted being so widespread, businesses should assess what is in their control right now,” says Keaton Dugan, Ag commodity business advisor. 

“You’ll want to take the time to ensure your Ag business and its supply chain are in the best place possible to navigate this new reality.”

  1. Analyze and understand your supply chains.
  2. Review contracts and pricing with suppliers and customers.
  3. Assess KPIs for cost management and margin protection.
  4. Analyze risk exposure, potential areas of loss, and cost increases.
  5. Perform financial modeling to highlight vulnerabilities and manage cash flow.
  6. Review sales arrangements for potential reductions.
  7. Continue to monitor global developments.

While Pinion’s government and public affairs team will continue to monitor and provide any updates on global tariffs impacting your business, Pinion’s strategic finance and accounting advisors can provide consultation and analyses to help you make good decisions and drive your business forward.