By Jerry Hagstrom DTN Political Correspondent And Chris Clayton DTN Ag Policy Editor

This article was originally published at 7:42 a.m. CST on Friday, March 7. It was updated with additional information at 4:29 p.m. CST on Friday, March 7.

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WASHINGTON (DTN) -- The Trump administration lowered tariffs on imported potash from 25% to 10% on Thursday and declared a victory for farmers in the process.

The move was part of President Trump suspending 25% tariffs that he had imposed on Canada and Mexico on Tuesday. The new deadline for tariffs going into effect is April 2. Potash tariffs would fall in line with lower tariffs on energy imports.

Trump said he would allow products that are traded under the rules of the U.S.-Mexico-Canada Agreement (USMCA), the trade pact he signed in his first term, but Agriculture Secretary Brooke Rollins pointed out that he reduced the tariff on potash that was not covered under the USMCA.

"President Trump's announcement which includes a reduction of tariffs on potash not already covered under the USMCA from 25% to 10% is a critical step in helping farmers manage and secure key input costs at the height of planting season while reinforcing long-term agricultural trade relations," Rollins said in a news release.

"The temporary tariff exemption for Canada and Mexico is a smart, strategic move to keep trade negotiations on course while delivering real results for American agriculture," Rollins said.

Rollins pressed on Canada, the No. 2 market for U.S. agricultural goods last year at $28.3 billion, to further open its markets.

"Canada must commit to fair trade practices -- including those in dairy, eggs, and poultry -- and Mexico must maintain open markets. Once again, the president's leadership ensures that U.S. farmers remain at the forefront -- fighting for fair trade, lower costs, and stronger market access."

In a tweet, Rollins also poked Canadian Prime Minister Justin Trudeau while suggesting U.S. dairy products are being kept out of Canada. "Governor Trudeau has been put on notice. Gone are the days when the U.S. caved to nations that took advantage of us. American farmers compete fairly, and now Canada must do the same. Canada must change their broken dairy policy and open markets to U.S. products."

The U.S. exported roughly $1.14 billion in dairy products to Canada in 2024, making it the second largest market after Mexico. Since 2017, dairy exports to Canada are up nearly $700 million annually, according to USDA's Foreign Agricultural Service.

The International Dairy Foods Association on Friday responded to a suggestion by President Trump to place reciprocal tariffs on Canadian dairy products. Canada imposes roughly 250% tariffs on certain U.S. dairy products, which are higher with 25% retaliatory tariffs in place, said Becky Rasdall Vargas, senior vice president of trade and workforce policy at IDFA

"However, that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA)," Rasdall Vargas said. "Frustratingly, the U.S. has never gotten close to exceeding our USMCA quotas because Canada has erected various protectionist measures that fly in the face of their trade obligations made under USMCA."

Rasdall Vargas added that the dairy industry is grateful for the Trump administration's efforts to hold Canada accountable for protectionist measures.

"At the same time, a prolonged tariff war with our top trading partners will continue to create uncertainly and additional costs for American dairy farmers, processors, and our rural communities," she said. "We urge Canada and the United States to negotiate a resolution to these issues -- both Canada's trade barriers to U.S. dairy exports and the tariffs -- as expeditiously as possible."

Separately, Canada has halted pork imports from Smithfield Foods' pork processing plant in Tar Heel, N.C., considered the largest such plant in the world. Canada filed a notice with USDA's Food Safety Inspection Service (FSIS) banning products from the plant on Thursday.

Canada did not ban any other processing plant. Canada is the fourth-largest market for U.S. pork products at $852 million, according to USDA data compiled by the U.S. Meat Export Federation.

In an email, Ray Atkinson, senior director of external communications at Smithfield, said the issue pertains to a limited number of certain offal shipments. But the ban does halt all products from the North Carolina plant to Canada. "We are working with USDA FSIS to expedite the resolution of this matter," he said.

Canadian officials maintained the initial tariffs they put in place on Tuesday on $21 billion in products. Trudeau on Thursday said he expects Canada and the U.S. would be in a trade war "for the foreseeable future." The Wall Street Journal reported Trump and Trudeau had a heated phone call on Thursday in which Trump complained about Canadian farm imports such as dairy products.

American Farm Bureau Federation President Zippy Duvall said in a news release, "Farm Bureau appreciates President Trump for delaying tariffs on imports from Mexico and Canada for another month. The pause will ensure farmers and ranchers can continue to export American agricultural goods to both countries without fear of retaliatory tariffs.

"Farm Bureau has been engaging with the White House, USDA, and the U.S. Trade Representative's office to emphasize the impact of tariffs on America's farmers and ranchers, who are already suffering through a third straight year of losses on almost all major crops," Duvall said.

"We encourage the administration to continue working toward permanently resolving issues with Mexico and Canada to preserve important markets and to ensure farmers have access to the supplies they need to keep America's pantries stocked."

Veronica Nigh, a senior economist at The Fertilizer Institute, noted in an interview with the Toronto Globe and Mail, "The reduced 10% tariff is welcome, but will still lead to higher fall potash prices."

More than 80% of U.S. potash comes from Canada. Sen. Chuck Grassley, R-Iowa, earlier in the week had called for Trump to exempt potash from tariffs altogether.

Looking at the fertilizer as leverage, the premiers of Ontario and Saskatchewan also have suggested not selling potash to the U.S. or applying export tariffs on it.

American Soybean Association President Caleb Ragland said U.S. soybean farmers are "appreciative" of the suspension but said they "encourage the administration to immediately engage with its counterparts in China to pursue a continuation of the Phase One trade agreement negotiated by President Trump and signed in 2020."

"The Phase One agreement brought much-needed tariff relief for farmers while addressing issues pertaining to market access, intellectual property protections and other issues important to U.S. agriculture and our country at large," Ragland said.

Sen. Amy Klobuchar, D-Minn., the ranking member on the Senate Agriculture Committee, led a group of senators in a letter to Trump urging him to reconsider the tariffs on Mexico, Canada and China.

Jerry Hagstrom can be reached at jhagstrom@nationaljournal.com

Follow him on social platform X @hagstromreport

Chris Clayton can be reached at Chris.Clayton@dtn.com

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