Here’s everything you need to know about CUSMA, the upcoming review process and what it could mean for the agriculture sector.

WHY IT MATTERS: The review of CUSMA could set the stage for a new era of trade and tariffs between Canada and the U.S.

CUSMA replaced the North American Free Trade Agreement (NAFTA), which was active from 1994 to 2020. The current trilateral agreement allows producers in all three countries to trade with each other in a mostly tariff-free environment.

U.S. President Donald Trump has consistently expressed his displeasure with CUSMA despite the fact that it was negotiated during his first administration.

Prime Minister Mark Carney has also claimed the relationship Canada thought it had with the U.S. is over, signalling a possible new era in North American trade.

According to Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, it is unlikely the three countries will return to the original mode of tariff-free trade under CUSMA.

“It sounds like the Americans are not in a compromising mood,” Leblond said. “It sounds like, ‘Okay, we’re going to put the gun to your head, and you’re going to give us what we want’.”

U.S. could abandon CUSMA with minimal legal consequences

Any of the three parties may leave the agreement as long as they provide six months’ notice, but Leblond said nothing is stopping the U.S. from taking more drastic action.

He also said there is nothing forcing the parties to start negotiating on July 1, the official start of the review.

“The reality is … the U.S. can just pull out and say, ‘Yeah, as of tomorrow, we are not applying (CUSMA) anymore,” said Leblond. “We’re pulling out and we don’t care about the six months’ notice’.”

“The sort of attitude would be, ‘well, just sue us’.”

If Canada and Mexico were to sue, a panel of arbitrators would likely rule the U.S. at fault and give permission for the two countries to retaliate with tariffs.

It would still be on Canada and Mexico to decide how to react.

“It’s a bit of a moot point where yes, the U.S. legally has to give notice, but in practice, they can do what they want.”

It leaves Canada in a precarious place, especially as the terms of the agreement may not feel permanent.

“The Trump administration ultimately cannot be trusted,” Leblond said. “And therefore, yes, we can negotiate, we can try to come to a deal, but we have no guarantee whether that deal will be respected. And even existing deals are not being respected.”

U.S. may split Canada and Mexico to weaken negotiating leverage

Leblond said the U.S. could push for bilateral negotiations instead of trilateral, meaning individual meetings with Canada and Mexico.

This could weaken the leverage Canada and Mexico would otherwise have working together.

Leblond said there are three likely options.

“One is really trilateral negotiations, comprehensive,” he said.

“There’s the (option) we renew CUSMA, but the U.S. negotiates bilaterally with Canada, bilaterally with Mexico, and then they try to fit that within the existing CUSMA.”

Or the countries could make bilateral deals outside of CUSMA.

There is precedent for this, as the U.S. recently negotiated a new deal with South Korea which goes against the countries’ existing agreement. The free trade agreement is still there, but it’s superseded by the new deal.

“Is that what the Americans are going to try to push with Canada on the one hand and Mexico and the other? It’s very possible,” Leblond said.

The ever-present possibility of the U.S. pushing more tariffs on Canada should be motivation for the government to seek other trade deals in the interim, he added.

Carney and other government officials have recently taken several trips to countries like India and Vietnam.

Longer-term, reducing dependency on the U.S. is a good idea, Leblond said.

“Even if we have a deal, let’s say some kind of renegotiation, a deal that we reach with the U.S., what’s the guarantee that that deal is going to hold? There is none.”

Congressional approval could limit Trump’s options

Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance (CAFTA), said it’s unlikely Trump will pull out of the agreement completely.

Under the American system, the president would need congressional approval for major changes. Harvey said this could be a problem for Trump, who is already seeing pushback on his tariffs including a recent Supreme Court challenge.

“Significant changes to the treaty would require going to Congress, and we haven’t seen the administration be all that interested in going to Congress with trade agreements,” Harvey said.

There could also be disagreement within the administration’s base. Harvey said in the two trade missions it took to Washington, D.C., last year, CAFTA started to see increased doubt about the tariff agenda amongst Republicans, particularly in agriculture states.

U.S. producer groups have also shown support for a CUSMA renewal.

“That’s really positive, because first, it’s our direct counterparts in the United States,” Harvey said. “Second, the agri-food sector, let’s face it, they tend to be supporters of President Trump. So, it’s a positive thing for supporters of President Trump to be so in favour of the agreement.”

“Tariffs mean increased cost for consumers, for producers,” he said. “We’ve been working hard at making sure that decision-makers understand that, and what we’ve seen in Washington is that they do, and it’s great to see the U.S. ag sector being sold about it.”

Trump has also protected the agri-food elements of the agreement. When the president imposed tariffs on Canada, CUSMA-compliant agri-food goods were exempted.

Full renewal with minor tech updates is best outcome for Canada

Harvey said the best-case scenario for Canada would be a full renewal with some minor updates on agricultural technology, but “just renewal with no changes at all would be a great-case scenario.”

The deal works well for the agri-food sector.

“It’s one of the best agreements in the world,” Harvey said. “We’ve got three countries working together, highly integrated supply chains, highly integrated markets. That’s something that we need to protect.”

It’s still likely Trump will hardball in the initial negotiations.

“He has a style that attracts attention to his demands,” Harvey said. “His demands are often quite high at the beginning of a negotiation and often change quickly.”

Leblond also called it a best-case scenario for Canada to maintain the current terms, but suspected the U.S. would continue to push for more access in Canada, particularly in supply-managed sectors.

“If we can play for time and try to maintain the status quo, to me that would be the best option for now for Canada,” he said. “And hopefully then, … for a lot of the agricultural goods that we export to the U.S., they will continue to be exported without tariffs because we meet the rules of origin.”

That’s why both sides seem to be pushing for “just don’t make things worse,” Leblond said.

“Talk, engage, negotiate, but don’t look for a quick deal,” he said. “That that would be my view.”

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“I want John Deere and Case and all of – they’re great companies, Caterpillar… I want these companies to give it to you in the form of lower tractor and equipment costs,” Trump told hundreds of farmers and ranchers gathered under drizzle at an event on the South Lawn of the White House.

Deere & Co shares dropped two per cent after the statement. Case IH manufacturer CNH Industrial fell one per cent while Caterpillar Inc was down nearly 1.2 per cent in late-session trading.

The three companies could not immediately be reached for comment.

Trump seeks support from struggling farmers

Trump called for lower prices in an aside during a speech that otherwise focused on shoring up support among the Republican president’s loyal constituency of rural voters, who have backed Trump in all three of the last presidential races.

For the fourth straight year, U.S. crop producers are facing tight margins, high production costs and low commodity prices – and are struggling financially – despite near-record government payments.

The Trump administration is distributing $12 billion (C$16.7 billion) in aid to U.S. farmers — a move that farm trade groups and agricultural economists have said is helpful in the short-term but will not fully compensate farmers for financial losses that have topped $30 billion in recent years.

On Friday, Trump said he would seek even more such aid for farmers from Congress. More than 50 farm-interest groups, such as the American Farm Bureau Federation, are urging Congress to approve additional aid in a military funding package.

Trump pledges new loan guarantees

The event happened as the administration finalized new biofuel blending mandates for U.S. oil refiners, requiring them to mix more of the fuels made from corn and other agricultural products into the nation’s gasoline and diesel than initially proposed, in an apparent win for farmers.

Trump also said the U.S. Small Business Administration would open up new loan guarantees for farmers and food suppliers.

Farmers are entering the critical spring planting season under a cloud of uncertainty as the U.S.-Israeli war with Iran disrupts global trade, causing fertilizer and diesel costs to spike.

The long-term U.S. trade relationship with China also remains unclear amid the ongoing trade war launched by Trump’s administration with the country, the world’s top soy importer.

Rural voters constitute a fifth of the U.S. electorate, and they favored Trump by a two-to-one margin over Democrat Kamala Harris in the 2024 presidential election.

— Additional reporting by Bhargav Acharya

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“Crude oil is going to be a big driver in this environment and therefore (soyoil), but there’s a lot of political stuff too,” Derwin said.

Along with the Middle East war, Derwin pointed to coming renewable fuel and biodiesel policies in the United States and the renegotiating of the Canada-U.S.-Mexico agreement.

U.S. President Donald Trump is scheduled on March 27 to announce the latest renewable fuel proposals coming from the Environmental Protection Agency. Meanwhile the review process for CUSMA is already underway.

Derwin said it’s important to protect oneself from possible wide swings in canola, which could range from C$600 to C$800 per tonne.

“It’s more of what happens if it goes to either one of those places,” Derwin said. “You don’t want to lock in too much in case of production concerns. There’s some big swing potential here.”

Added to that is the forthcoming canola crop.

“We’re a little bit early where any kind of seeding concerns or weather-driven concerns come into play,” he said, emphasizing that could change in the coming weeks and months.

The post ICE Canada Weekly: More behind canola, soyoil than crude oil prices appeared first on Alberta Farmer Express.

CUSMA replaced the North American Free Trade Agreement (NAFTA), which was active from 1994 to 2020. The current trilateral agreement allows producers in all three countries to trade with each other in a mostly tariff-free environment.

WHY IT MATTERS: The review of CUSMA could set the stage for a new era of trade and tariffs between Canada and the U.S.

U.S. President Donald Trump has consistently expressed his displeasure with CUSMA despite the fact that it was negiotiated during his first administration.

Prime Minister Mark Carney has also claimed the relationship Canada thought it had with the U.S. is over, signalling a possible new era in North American trade.

According to Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, it is unlikely the three countries will return to the original mode of tariff-free trade under CUSMA.

“It sounds like the Americans are not in a compromising mood,” Leblond said. “It sounds like, ‘Okay, we’re going to put the gun to your head, and you’re going to give us what we want.’”

Can the U.S. pull out of CUSMA?

Any of the three parties may leave the agreement as long as they provide six months’ notice, but Leblond said nothing is stopping the U.S. from taking more drastic action.

He also said there is nothing forcing the parties to start negotiating on July 1, the official start of the review.

“The reality is, … the U.S. can just pull out and say, ‘yeah, as of tomorrow, we are not applying (CUSMA) anymore,” said Leblond. “We’re pulling out and we don’t care about the six months’ notice.’”

“The sort of attitude would be, ‘well, just sue us.’”

If Canada and Mexico were to sue, a panel of arbitrators would likely rule the U.S. at fault and give permission for the two countries to retaliate with tariffs.

It would still be on Canada and Mexico to decide how to react.

“It’s a bit of a moot point where yes, the U.S. legally has to give notice, but in practice, they can do what they want.”

It leaves Canada in a precarious place, especially as the terms of the agreement may not feel permanent.

“The Trump administration ultimately cannot be trusted,” Leblond said. “And therefore, yes, we can negotiate, we can try to come to a deal, but we have no guarantee whether that deal will be respected. And even existing deals are not being respected.”

U.S. could face challenges in leaving the agreement

Michael Harvey, Executive Director of the Canadian Agri-Food Trade Alliance (CAFTA), said it’s unlikely Trump will pull out of the agreement completely.

Under the American system, the President would need congressional approval for major changes. Harvey said this could be a problem for Trump, who is already seeing pushback on his tariffs including a recent Supreme Court challenge.

“Significant changes to the treaty would require going to Congress, and we haven’t seen the administration be all that interested in going to Congress with trade agreements,” Harvey said.

There could also be disagreement within the administration’s base. Harvey said in the two trade missions it took to Washington D.C. last year, CAFTA started to see increased doubt about the tariff agenda amongst Republicans, particularly in agriculture states.

U.S. producer groups have also shown support for a CUSMA renewal.

“That’s really positive, because first, it’s our direct counterparts in the United States,” Harvey said. “Second, the agri-food sector, let’s face it, they tend to be supporters of President Trump. So, it’s a positive thing for supporters of President Trump to be so in favor of the agreement.”

“Tariffs mean increased cost for consumers, for producers,” he said. “We’ve been working hard at making sure that decision-makers understand that, and what we’ve seen in Washington is that they do, and it’s great to see the U.S. ag sector being sold about it.”

Trump has also protected the agri-food elements of the agreement. When the President imposed tariffs on Canada, CUSMA-compliant agri-food goods were exempted.

What’s Canada’s best-case scenario?

Harvey said the best-case scenario for Canada would be a full renewal with some minor updates on agricultural technology, but “just renewal with no changes at all would be a great-case scenario.”

The deal works well for the agri-food sector.

“It’s one of the best agreements in the world,” Harvey said. “We’ve got three countries working together, highly integrated supply chains, highly integrated markets. That’s something that we need to protect.”

It’s still likely Trump will hardball in the initial negotiations.

“He has a style that attracts attention to his demands,” Harvey said. “His demands are often quite high at the beginning of a negotiation and often change quickly.”

Leblond also called it a best-case scenario for Canada to maintain the current terms, but suspected the U.S. would continue to push for more access in Canada, particularly in supply-managed sectors.

“If we can play for time and try to maintain the status quo, to me that would be the best option for now for Canada,” he said. “And hopefully then, … for a lot of the agricultural goods that we export to the U.S., they will continue to be exported without tariffs because we meet the rules of origin.”

That’s why both sides seem to be pushing for “just don’t make things worse,” Leblond said.

“Talk, engage, negotiate, but don’t look for a quick deal,” he said. “That that would be my view.”

Bilateral vs. trilateral negotiations

Leblond said the U.S. could push for bilateral negotiations instead of trilateral, meaning individual meetings with Canada and Mexico.

This could weaken the leverage Canada and Mexico would otherwise have working together.

Leblond said there are three likely options.

“One is really trilateral negotiations, comprehensive,” he said.

“There’s the (option) we renew CUSMA, but the U.S. negotiates bilaterally with Canada, bilaterally with Mexico, and then they try to fit that within the existing CUSMA.”

Or the countries could make bilateral deals outside of CUSMA.

There is precedent for this, as the U.S. recently negotiated a new deal with South Korea which goes against the countries’ existing agreement. The free trade agreement is still there, but it’s superseded by the new deal.

“Is that what the Americans are going to try to push with Canada on the one hand and Mexico and the other? It’s very possible,” Leblond said.

The ever-present possibility of the U.S. pushing more tariffs on Canada should be motivation for the government to seek other trade deals in the interim, he added.

Carney and other government officials have recently taken several trips to countries like India and Vietnam.

Longer-term, reducing dependency on the U.S. is a good idea, Leblond said.

“Even if we have a deal, let’s say some kind of renegotiation, a deal that we reach with the U.S., what’s the guarantee that that deal is going to hold? There is none.”

The post CUSMA: a guide to the review and what it means for the agriculture sector appeared first on Alberta Farmer Express.

Trump initially signed an order on Friday for a 10 per cent tariff to last 150 days to replace broad duties under an emergency law that were struck down by the Supreme Court, but on Saturday, he said he would increase the rate to 15 per cent.

WHY IT MATTERS: Canadian agricultural goods are largely exempt from new, 10 per cent tariffs under the CUSMA trade agreement. However, the tariffs and uncertainty in the marketplace may have other knock-on effects for the sector.

But on Monday night before the midnight start of collections, the U.S. Customs and Border Protection agency notified shippers that the rate would be 10 per cent..

The White House official told Reuters that Trump has had “no change of heart” in his desire for a 15 per cent tariff under Section 122 of the Trade Act of 1974, but offered no details on the timing for that increase.

As of Monday, Trump had not signed a formal presidential order for the increase to 15 per cent and CBP can only act on published presidential executive orders and proclamations.

CBP’s notice referred to his Friday order, saying that aside from products covered by exemptions, imports would “be subject to an additional ad valorem rate of 10 per cent.”

Unclear why lower rate is imposed

The move added to confusion surrounding U.S. trade policy, with no explanation offered in the notice for why the lower rate had been used.

“Remember that Trump is delivering the State of the Union address tonight, so it’s possible we might get a better sense of the next steps on tariffs,” Deutsche Bank said in a note.

“Net-net we still think the effective tariff rate will fall this year and that the world post-SCOTUS will see lower tariffs than the pre-SCOTUS world,” its analysts said, using the acronym for the Supreme Court of the United States.

The new tariffs took effect at midnight, while collection of the tariffs annulled by the Supreme Court was halted. They had ranged from 10 per cent to as much as 50 per cent.

It remains unclear whether and how companies will be refunded for tariff payments made under the regime annulled by the Supreme Court.

The Section 122 law allows the president to impose the new duties for up to 150 days to address “large and serious” balance-of-payments deficits and “fundamental international payments problems.”

Trump’s tariff order argued that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual U.S. goods trade deficit, a current account deficit of four per cent of GDP and a reversal of the U.S. primary income surplus. But some economists and trade lawyers argue that the U.S. is not on the cusp of a balance-of-payments crisis, making the new duties vulnerable to a legal challenge.

Trump warns against reneging on trade deals

On Monday Trump warned countries against backing away from any previously negotiated trade deals with the U.S., warning he would hit them with much higher duties under different laws.

Japan said it had asked the United States to ensure its treatment under a new tariff regime would be as favourable as in an existing agreement. The European Union, Britain and Taiwan all indicated a preference to stick to their deals too.

Carsten Brzeski, global head of macro at ING, noted that even with the 150-day limit of the current set of measures, the trade uncertainty was unlikely to go away soon.

“Because the next thing that he (Trump) could do is always, with the interruption of one day, theoretically endlessly extend by 150 days,” he said.

China meanwhile urged Washington to abandon its “unilateral tariffs”, indicating it was willing to hold another round of trade talks with the world’s largest economy, the country’s commerce ministry said in a statement on Tuesday.

— Additional reporting by Mark John and Francesco Canepa in Frankfurt

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In early 2025, Trump invoked the act to impose tariffs on Canada, along with Mexico and China, claiming the countries failed to stop illicit drug trafficking into the United States.

WHY IT MATTERS: Following a U.S. Supreme Court decision striking down some of Donald Trump’s tariffs, the U.S. President swiftly enacted new, 15 per cent global tariffs. While agricultural goods are largely exempt under CUSMA, on-again, off-again tariffs have created a lot of economic uncertainty.

The ruling is the latest episode in a political dust-up between Canada and its neighbour to the south which recently involved the Gordie Howe International Bridge linking Ontario and Michigan.

More than steel or stone, the bridge is a symbol of a shared destiny that both respects and transcends differences. Despite their historical, institutional and political differences, Canada and the United States have bonded economically as neighbours, generating shared prosperity over the past two centuries.

In 2023, I wrote a book chapter Canada and the United States: A Symbiotic Relationship or Complex Entanglement? In that chapter, I posed a question: What if the United States becomes more aggressive and even less open to working co-operatively with Canada? To answer that question, Canada can draw lessons from its centuries-long coexistence with an often-erratic neighbour to successfully navigate the economic volatility of the present era.

While the recent Supreme Court ruling presents a setback for Trump, it is unlikely to stop him from using U.S. economic and military might as leverage against Canada and other countries. Trump swiftly signed a new executive order imposing 10 per cent global tariffs under different regulations — which were then bumped up to 15 per cent.

As Canada navigates this belligerent U.S. government, a lingering question is whether this history of interwoven reciprocity is deteriorating into a complex entanglement of vulnerability.

Two neighbours, different worlds

In the book chapter, I describe the Canada-U.S. relationship as a complex picture of deep interdependence, marked by significant power imbalances, and the creative ways Canada has learned to adapt and prosper.

The economic and political interests of the two countries have diverged and converged in undulating waves over the past 200 years. The two economies are inextricably intertwined across a range of sectors, from natural resources and agriculture to advanced manufacturing. Around 70 per cent of Canadian exports go to the U.S., and the share of Canada’s merchandise imports from south of the border was around 59 per cent in 2025.

But for Canada, the relationship is more than just economic interdependence. The U.S. has a population of about 342 million and a gross domestic product about 10 times larger than Canada’s. That sets the stage for an asymmetrical relationship whose threads are woven into the fabric of trade and geopolitics.

For Canada, this can sometimes feel like vulnerability. And that vulnerability is increasingly being exploited by the U.S., creating a general feeling of existential crisis and entrapment.

Nevertheless, Canada can draw from its centuries-long experience to navigate the current headwinds. While the smaller of the two neighbours, it is not entirely dependent on the U.S. for influencing global events or harnessing international opportunities.

Canada has been, and still is, an influential power on the international stage. As a G7 nation, Canada is one of the key pillars in the scaffolding of the global economy. This global standing and international influence give it some room to maneuver.

Navigating an existential crossroads

First, in the international arena, Canada must diversify economically and geopolitically to build strategic resilience. Prime Minister Mark Carney is already moving on this front by agreeing to ease mutual tariffs with China. With negotiations to renew the Canada-U.S.-Mexico Agreement (CUSMA) slated for this year, a diversified trading economy will give Canada much greater leverage to navigate the vulnerabilities of asymmetry.

Second, Canada should draw from its record of championing a rules-based order. In recent years, the country has had to skillfully navigate the crossroads of projecting and defending its global and liberal-democratic values during periods of U.S. flirtations with populism, isolationism and anti-international rhetoric. As a middle power, it derives its strength from the rule of law and by presenting a united front with like-minded nations. A wider set of partners means more buffers against trade policy whiplashes and geopolitical shocks from the U.S.

Third, domestically, loosening inter-provincial trade flows, updating anachronistic regulatory frameworks and pursuing digital data sovereignty strategies should be high priorities to fire the full engine of the economy.

Similarly, as I’ve previously argued, Canada should use its comparative advantages in natural resources to create a strong, well-connected critical minerals supply chain. This would give it significant strategic leverage in the global economy as the world shifts to electrification and renewable energy.

Over the past two centuries, Canada has mastered the complex dance of asymmetry. However, the current crisis takes on an existential proportion that will require new agility, courage and decisiveness. It is an inflection point that will mark a consequential shift for the next generation.

Canada’s nimbleness and agility in navigating this political moment could be an model for other countries that must manoeuvre a world where the old rules no longer apply. It can serve as an example for small and middle powers who must navigate a world where great powers are increasingly belligerent.

—Charles Conteh is professor of public policy and administration at Brock University

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The tariff will be “over and above our normal tariffs already being charged,” Trump said in a media briefing.

“The Supreme Court did not overrule tariffs. They merely overruled a particular use of IEEPA for tariffs.”

Trump said his administration would also launch several investigations “to protect our country from unfair trading practices of other countries and companies.”

WHY IT MATTERS: While Canadian agricultural goods largely escaped tariffs under the CUSMA trade agreement, U.S. President Donald Trump’s on-again, off-again tariffs created significant uncertainty.

Trump signed an executive order later Friday imposing a 10 per cent ad valorem tariff to take effect on articles imported into the U.S. starting Tuesday (Feb. 24).

Section 122 allows the president to impose duties up to 15 per cent or quotas for up to 150 days, the Retail Industry Leaders Association explained in a post.

“Specifically, Section 122 allows the President to impose duties of up to 15 per cent or quotas for up to 150 days on imports from all countries, or selectively against countries that maintain unjustifiable or unreasonable restrictions on U.S. commerce.”

The new 10 per cent tariff will not be imposed on any CUSMA-compliant “goods of Canada and Mexico,” the White House said in a fact sheet later Friday.

Nor will it be imposed on “certain agricultural products, including beef, tomatoes, and oranges.”

Other imports exempt from the new tariff will include “natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States or grown, mined, or otherwise produced in sufficient quantities to meet domestic demand” as well as “certain critical minerals, metals used in currency and bullion, energy and energy products.”

Among other specific goods, pharmaceuticals and electronics, it will also not apply to “passenger vehicles, certain light trucks, certain medium and heavy-duty vehicles, buses, and certain parts of passenger vehicles, light trucks, heavy-duty vehicles and buses.”

Trump on Friday separately announced the continued suspension, first imposed on Feb. 1 last year, of duty-free de minimis treatment for low-value shipments, including goods shipped through the international postal system. Those goods will also be subject to the new 10 per cent tariff.

In a separate social media post Saturday (Feb. 21), Trump said he would instead set his new Section 122 tariff “effective immediately” at “the fully allowed, and legally tested, 15 per cent level,” but as of Sunday (Feb. 22) had not yet issued a new or updated proclamation or executive order to that effect.

Canadian groups react

Canadian Federation of Agriculture president Keith Currie told Glacier FarmMedia in a text that he hoped the Supreme Court’s decision would bring back some stability to cross-border trade. However, he noted that we’d have to wait and see what other tools the Trump administration utilizes.

“Obviously this court decision supports what we’ve been saying about the tariffs not being justified,” Currie said.

“Today’s Supreme Court ruling that the IEEPA tariffs are unlawful is welcome news for equipment manufacturers, which have spent the last year navigating higher input costs and mounting trade uncertainty,” said Kip Eideberg, senior vice-president of industry and government relations for the Association of Equipment Manufacturers, in a statement.

“What equipment manufacturers need most is certainty so they can make long-term decisions that benefit their workers, their customers, and the broader economy.”

Following Trump’s vow to impose other tariffs, the Association of Equipment Manufacturers reiterated equipment manufacturers’ need for certainty while making longterm decisions.

The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court’s decision that the Republican president’s use of this 1977 law exceeded his authority.

Trump says he’s “ashamed” of SCOTUS members

Trump, in comments at the White House, condemned the ruling as “terrible” and lashed out at the six justices who ruled against him.

“I’m ashamed of certain members of the court – absolutely ashamed – for not having the courage to do what’s right for our country,” Trump said.

Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool.

“Our task today is to decide only whether the power to “regulate … importation,” as granted to the president in IEEPA, embraces the power to impose tariffs. It does not,” Roberts wrote in the ruling, quoting the statute’s text that Trump claimed had justified his sweeping tariffs.

The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs.

Tariffs have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.

Trump has called his tariffs vital for U.S. economic security, predicting that the country would be defenseless and ruined without them.

“Foreign countries that have been ripping us off for years are ecstatic,” Trump said on Friday. “They’re so happy, and they’re dancing in the streets, but they won’t be dancing for long that, I can assure you.”

The Supreme Court, which has a 6-3 conservative majority, had allowed Trump’s expansive exertion of presidential powers in other areas in a series of rulings issued on an emergency basis, and Friday’s ruling represented the biggest setback it has dealt him since he returned to office in January 2025.

“It’s my opinion that the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think,” Trump said.

“He cannot”

Roberts, citing a prior Supreme Court ruling, wrote that “the president must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs,” adding: “He cannot.”

Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool. They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.

The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 U.S. states, most of them Democratic-governed, against Trump’s unprecedented use of this law to unilaterally impose the import taxes.

Trump’s tariffs were forecast to generate over the next decade trillions of dollars in revenue for the United States, which possesses the world’s largest economy.

Tariffs will likely need to be refunded

Trump’s administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday that the amount collected in Trump’s tariffs based on the International Emergency Economic Powers Act stood at more than $175 billion (C$239.4 billion). And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs.

The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs. But Trump instead turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every U.S. trading partner without the approval of Congress. Trump has imposed some additional tariffs under other laws that are not at issue in this case. Based on government data from October to mid-December, those represent about third of the revenue from Trump-imposed tariffs.

IEEPA lets a president regulate commerce in a national emergency. Trump became the first president to use IEEPA to impose tariffs, one of the many ways he has aggressively pushed the boundaries of executive authority since he returned to office in areas as varied as his crackdown on immigration, the firing of federal agency officials, domestic military deployments and military operations overseas.

Trump described the tariffs as vital for U.S. economic security, predicting that the country would be defenseless and ruined without them. Trump in November told reporters that without his tariffs “the rest of the world would laugh at us because they’ve used tariffs against us for years and took advantage of us.” Trump said the United States was abused by other countries including China, the second-largest economy.

U.S. could invoke other legal justifications: Bessent

After the Supreme Court heard arguments in the case in November, Trump said he would consider alternatives if it ruled against him on tariffs, telling reporters that “we’ll have to develop a ‘game two’ plan.”

Treasury Secretary Scott Bessent and other administration officials said the United States would invoke other legal justifications to retain as many of Trump’s tariffs as possible. Among others, these include a statutory provision that permits tariffs on imported goods that threaten U.S. national security and another that allows retaliatory actions including tariffs against trading partners that the Office of the U.S. Trade Representative determines have used unfair trade practices against American exporters.

None of these alternatives offered the flexibility and blunt-force dynamics that IEEPA provided Trump, and may not be able to replicate the full scope of his tariffs in a timely fashion.

Trump’s ability to impose tariffs instantaneously on any trading partner’s goods under the aegis of some form of declared national emergency raised his leverage over other countries. It brought world leaders scrambling to Washington to secure trade deals that often included pledges of billions of dollars in investments or other offers of enhanced market access for U.S. companies.

But Trump’s use of tariffs as a cudgel in U.S. foreign policy has succeeded in antagonizing numerous countries, including those long considered among the closest U.S. allies.

IEEPA historically had been used for imposing sanctions on enemies or freezing their assets, not to impose tariffs. The law does not specifically mention the word tariffs. Trump’s Justice Department had argued that IEEPA allows tariffs by authorizing the president to “regulate” imports to address emergencies.

Tariffs generated $195 billion

The Congressional Budget Office has estimated that if all current tariffs stay in place, including the IEEPA-based duties, they would generate about $300 billion annually over the next decade.

Total U.S. net customs duty receipts reached a record $195 billion (C$266.8 billion) in fiscal 2025, which ended on September 30, according to U.S. Treasury Department data.

On April 2 on a date Trump labeled “Liberation Day,” the president announced what he called “reciprocal” tariffs on goods imported from most U.S. trading partners, invoking IEEPA to address what he called a national emergency related to U.S. trade deficits, though the United States already had run trade deficits for decades.

In February and March of 2025, Trump invoked IEEPA to impose tariffs on China, Canada and Mexico, citing the trafficking of the often-abused painkiller fentanyl and illicit drugs into the United States as a national emergency.

Trump has wielded his tariffs to extract concessions and renegotiate trade deals, and as a weapon to punish countries that draw his ire on non-trade political matters. These have ranged from Brazil’s prosecution of former president Jair Bolsonaro, India’s purchases of Russian oil that help fund Russia’s war in Ukraine, and an anti-tariffs ad by Canada’s Ontario province.

IEEPA was passed by Congress and signed by Democratic President Jimmy Carter. In passing the measure, Congress placed additional limits on the president’s authority compared to a predecessor law.

The cases on tariffs before the justices involved three lawsuits.

The Washington-based U.S. Court of Appeals for the Federal Circuit sided with five small businesses that import goods in one challenge, and the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont in another.

Separately, a Washington-based federal judge sided with a family-owned toy company called Learning Resources.

— Additional reporting by David Lawder and John Kruzel. With files from Jonah Grignon and Geralyn Wichers.

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The order underscores U.S. farmers’ needs to have access to the herbicide, Bayer said on Thursday, adding the move would not lead to shortages of glyphosate in other countries.

WHY IT MATTERS: Glyphosate-based herbicides like Roundup are key crop protection products for Canadian farmers, but they’ve been the object of lawsuits on both sides of the border.

Bayer said last August that it could be forced to stop U.S. production of the widely-used farming weedkiller unless regulatory changes are made to stave off litigation that has been weighing on the German company.

Bayer is the only company producing glyphosate in the United States but the farming sector there also imports large volumes of generic copies from China.

Bayer, which has been trying for years to fend off contested product liability claims that the weedkiller caused cancer, earlier this week reached an agreement to pay as much as US$7.25 billion to resolve tens of thousands of such lawsuits.

Separately, the German group has persuaded the U.S. Supreme Court to hear an appeal that would sharply limit Bayer’s liability in the lawsuits, which have been brought mainly by private gardening users.

The top court’s decision to rule on the matter came after the Trump administration supported Bayer’s view that federal glyphosate regulation, which is mainly in Bayer’s favour, should take precedence over state laws invoked by the plaintiffs.

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A White House official said in October that Trump would make such a move, evoking fury from the nation’s cattle ranchers.

Trump has faced pressure to address the issue of affordability, which helped propel Democratic candidates to several electoral victories in 2025.

U.S. beef prices set record highs last year, benefiting ranchers who largely supported Trump, due to strong consumer demand and declining cattle supplies.

Ranchers slashed the herd to its lowest level in 75 years as of January 1 following a persistent drought that burned up pastures used for grazing and hiked feeding costs, according to U.S. data.

Unlikely to significantly lower beef costs

Trump’s decision to raise the tariff rate quota on Argentine beef by 80,000 metric tons will let Argentina ship more of its beef to the U.S. at a lower rate of duty. The increase will apply only to lean beef trimmings, which are blended with domestic supplies to make hamburger meat, according to the proclamation.

“Instead of imports that sideline American ranchers, we should be focused on solutions that cut red tape, lower production costs, and support growing our cattle herd,” said Republican U.S. Senator Deb Fischer of Nebraska, a major cattle-producing state.

Washington and Buenos Aires signed a broader new trade and investment agreement that will give preferential market access to U.S. goods in Argentina.

Economists have said increased U.S. imports of Argentine beef will likely be too small to significantly lower costs for grocery store shoppers, but the shipments could help improve margins for food companies.

The U.S. imported about 33,000 metric tons of Argentine beef in 2024, representing two per cent of total imports, according to government data.

— Reporting by Tom Polansek, Ismail Shakil and Bhargav Acharya

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In a goodwill gesture two months before Trump’s expected visit to Beijing, Trump said Xi would consider hiking soybean purchases from the United States to 20 million metric tons in the current season, up from 12 million tons previously. Soybean futures rallied.

Hours after Xi’s virtual meeting with Russian President Vladimir Putin, Xi and Trump discussed Taiwan and a wide range of trade and security issues that remain a source of tension between the world’s two biggest economies. Both leaders publicly affirmed their personal stakes in strong relations after the call, their first since November.

Preserving stability

Trump said on Truth Social that the call was “all very positive,” that his relationship with Xi is “extremely good,” and that “we both realize how important it is to keep it that way.” An official Chinese government account said that Xi had said, “I attach great importance to Sino-U.S. relations.”

Though Trump has tagged China as the reason for several hawkish policy steps from Canada to Greenland and Venezuela, he has eased policy toward Beijing in the past several months in key areas, from tariffs to advanced computer chips and drones.

“Both sides are signalling that they want to preserve stability in the U.S.-China relationship,” said Bonnie Glaser of the German Marshall Fund of the United States, a think tank.

Soybeans a key issue

Economic issues continue to be a flashpoint between the world’s biggest consumer and its biggest factory. Trump has made tariffs on imports a pillar of his strategy to revive domestic manufacturing jobs. U.S. Vice President JD Vance on Wednesday unveiled plans for a preferential trade bloc of allies for critical minerals, part of an effort to eliminate leverage that China has over the United States because of its control of key metals.

The two sides are working to find areas of accord heading into an expected April state visit by Trump to Beijing. Trump and Xi last met in person in October in South Korea, where their current trade truce was struck.

Soybeans are key because struggling U.S. farmers are a major domestic political constituency for Trump, and China is the top consumer. Overseas sales of U.S. soybeans this year slumped to the lowest in 14 years due to trade tensions with China. Benchmark Chicago Board of Trade soybean futures surged more than three per cent to a two-month high.

Demand could outstrip supply

U.S. supplies are not sufficient to export another 8 million tons to China while also meeting expected demand from other importers, said Arlan Suderman, chief commodities economist for StoneX, a consultancy. U.S. soybean prices could rise and some U.S. and international buyers could satisfy demand by buying soybeans from Brazil instead, he said.

China’s commerce ministry did not immediately respond to a Reuters request for comment on the possibility of soybean purchases.

U.S. Representative Ro Khanna, a Democrat who sits on a committee focused on China, criticized Trump’s dealmaking.

“He points to China’s soybean buying as proof of progress, despite volumes still trailing where they stood before he took office,” Khanna said in a statement. “He says nothing about China’s aggression towards Taiwan, support for Putin’s invasion of Ukraine or human rights abuses.”

In addition to soybeans, the U.S. and Chinese leaders discussed Iran, Russia’s war in Ukraine, airplane engines and oil and gas, Trump said.

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