Trump sharply raised tariffs on goods from China, Canada and Mexico, which caused stock market prices for corn and soybeans to collapse

US President Donald Trump has increased tariffs on Chinese goods from 10% to 20%, citing “the failure of the Chinese authorities to take action to reduce the continued flow of synthetic opioids, including fentanyl.” He also announced the introduction of a 25% tariff on Canadian and Mexican goods starting March 4 and the introduction of tariffs on all imported agricultural products starting April 2.

“Big farmers need to produce more agricultural products to sell inside the United States. Tariffs on foreign products will take effect on April 2. Have fun!” Trump said.

The markets reacted to this with a fall in US stock indices by 1.5-2.6% and a decrease in prices for corn and soybeans, which will be the first to suffer from the introduction of mirror duties by importers.

On the Chicago Board of Trade, March corn futures fell 3.1% yesterday to $173.3/t (-12.5% for the month), and soybean futures fell 1.4% to $366.8/t (-7.7%).

In 2024, the United States exported 30 million tons of corn worth $5.62 billion to Mexico, $449 million to Canada, $385 million to the EU, and $328 million to China, so the introduction of mirror duties could lead to a further drop in prices, which would hit American farmers.

Canadian Prime Minister Justin Trudeau said that if tariffs are imposed on Canadian goods, Canada will impose a 25% tariff on goods from the United States. Recall that Canada is the largest supplier of steel and aluminum to the United States.

The governor of the Canadian province of Ontario also said that if tariffs are imposed, he would immediately shut off electricity to the northern US states, where it is supplied from Canada.

Inflation in the US is expected to accelerate due to rising food prices, as up to 70% of fruits and vegetables are imported from Mexico. In addition, prices will rise for cars, the production of which is heavily dependent on cooperation with Mexican units.

Mexico, Canada, and China are the three largest trading partners of the United States, although the European Union, as a single bloc, is a larger partner than the three countries listed separately.

Economists have repeatedly warned that tariffs could lead to higher prices and inflation in the U.S. But Trump believes it will only cause short-term problems and ultimately benefit the world’s largest economy.

Tags: corn, EU, prices, soybean, Canada, USA, restrictions, Mexico, China