Trump said the suspension of the levies comes as more than 75 countries were set to negotiate trade with the U.S. or had not taken retaliatory action. However, Trump increased duties on China to 125 per cent from 104 per cent. Meanwhile, China will further raise their tariffs on the U.S. to 84 per cent.

The June live cattle contract advanced 4.750 cents at 198.375 cents per pound.

May feeder cattle futures climbed 6.475 cents at 278.200 cents per pound.

The USDA reported wholesale boxed beef prices were lower on Wednesday afternoon, as choice boxes shed 24 cents at $337.86 per hundredweight and select boxes lost $1.45 at $320.61.

Tuesday’s federally inspected cattle slaughter was estimated at 122,000 head, for a slip of 1,000 from the previous Tuesday.

Lean hog prices were higher on Wednesday as the June contract stepped up 1.925 cents at 91.700 cents per pound.

The USDA reported Tuesday’s federally inspected hog slaughter amounted to 488,000 head for an increase of 23,000 from a week ago.

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Why it matters: Canada and the U.S. are major trade partners, with agricultural goods flowing in both directions across the border.

The tariff actions, which could upend nearly $2.2 trillion in annual U.S. trade with its top three trading partners, went live at 12:01 a.m. EST (0501 GMT). Trump declared that all three countries had failed to do enough to stem the flow of the deadly fentanyl opioid and its precursor chemicals into the U.S.

Find the latest trade war updates here

China responded immediately, announcing additional tariffs of 10 to 15 per cent on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities. Later it said it had raised complaints about the new measures with the World Trade Organization.

Canada and Mexico, which have enjoyed a virtually tariff-free trading relationship with the U.S. for three decades, were poised to immediately retaliate.

Canadian Prime Minister Justin Trudeau said Ottawa was launching 25 per cent tariffs on C$30 billion (US$20.7 billion) worth of U.S. imports, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper.

Trudeau said Canada would slap tariffs on another C$125 billion of U.S. imports if Trump’s tariffs were still in place in 21 days. Consultation over these produce were still taking place, but they are expected to include vehicles, steel, aircraft, fruits and vegetables, beef and pork.

“Tariffs will disrupt an incredibly successful trading relationship,” Trudeau said, adding that they would violate the U.S.-Mexico-Canada free trade agreement signed by Trump during his first term.

Ontario Premier Doug Ford told NBC that he was ready to cut off shipments of nickel and transmission of electricity from his province to the U.S.

Mexican President Claudia Sheinbaum said on Tuesday there was “no reason, rationale or justification” for Trump’s actions after Mexico took “decisive actions” against organized crime and fentanyl trafficking.

She vowed retaliation and said she would announce Mexico’s response at an event on Sunday in Mexico City’s iconic Zocalo square.

The European Union’s executive Commission said it “deeply regrets” the decision, which risked disrupting global trade. Trump has vowed to impose “reciprocal tariffs” on EU goods on April 2.

PRICE HIKES

The tariffs were already sparking some U.S. price increases, running counter to Trump’s election vow to bring down living costs for Americans.

Target CEO Brian Cornell told CNBC that the retail giant would increase prices “over the next couple of days” on some seasonal grocery products such as avocados from Mexico.

“If there’s a 25 per cent tariff, those prices will go up … certainly over the next week,” Cornell said.

Electronics retailer Best Buy also warned of potential higher prices as the tariffs came into effect. Best Buy CEO Corie Barrie told analysts on a call that China remains the top source of products sold by the company, with Mexico in second place.

The 20 per cent tariff on Chinese imports will apply to several key Chinese electronics categories untouched by prior duties, including smart phones, laptops, video game consoles, smart watches and speakers and Bluetooth devices.

Barrie said the price increases could play out over a longer period, as Best Buy typically carries about six weeks worth of inventory.

STACKING CHINA TARIFFS

The extra 10 per cent duty on Chinese goods adds to a 10 per cent tariff imposed by Trump on February 4 to punish Beijing over the U.S. fentanyl overdose crisis. The cumulative 20 per cent duty comes on top of tariffs of up to 25 per cent imposed by Trump during his first term on some $370 billion worth of U.S. imports.

Some of these products saw U.S. tariffs increase sharply under former president Joe Biden last year, including a doubling of duties on Chinese semiconductors to 50 per cent and a quadrupling of tariffs on Chinese electric vehicles to over 100 per cent.

China’s new tariffs announced on Tuesday targeted a wide range of U.S. agricultural products including certain meats, grains, cotton, fruit, vegetables and dairy products.

Beijing also placed 25 U.S. firms under export and investment restrictions on national security grounds. Ten of these firms were targeted for selling arms to Taiwan.

China’s commerce ministry said the U.S. tariffs violated World Trade Organization rules and “undermine the basis for economic and trade cooperation between China and the U.S.”

U.S. farmers were hard hit by Trump’s first-term trade wars, which cost them about $27 billion in lost export sales and conceded share of the Chinese market to Brazil.

RECESSION FEARS

The tariffs on Mexican and Canadian products could have much deeper repercussions for a highly integrated North American economy that depends on cross-border shipments to build cars and machinery, refine energy and process agricultural goods.

“Today’s reckless decision by the U.S. administration is forcing Canada and the U.S. toward recessions, job losses and economic disaster,” Canadian Chamber of Commerce CEO Candace Laing said in a statement.

Even before Trump’s tariffs announcement, U.S. data on Monday showed factory gate prices jumped to a nearly three-year high, suggesting that a new wave of tariffs could soon undercut production.

The Federal Reserve Bank of Atlanta’s GDPNow model showed a stunning shift to a 2.8 per cent U.S. GDP contraction in the first quarter, from a 2.3 per cent estimated growth last week.

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Trump on Saturday ordered tariffs on goods from Mexico, Canada and China, demanding they staunch the flow of fentanyl — and illegal immigrants in the case of Canada and Mexico — but later froze tariffs against the two North American countries.

China, which Trump subjected to a tariff of 10 per cent on goods exports, had vowed to challenge the step at the WTO.

In a statement cited by the WTO, China’s government said the measures appeared to be inconsistent with U.S. obligations under the agreement that led to the creation of the trade body.

“China reserves the right to raise additional measures and claims regarding the matters identified herein during the course of consultations and in any future request for the establishment of a panel,” the Chinese statement said.

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In central Alberta, larger frame lower flesh tan mixed steers averaging 1,000 pounds on light grain and silage diet with full processing data sold for $353. At the Lloydminster sale, Simmental based steers averaging 905 pounds left the crowd gasping by selling for $386.  Northwest of Winnipeg, Simmental blended heifers with medium to lower flesh levels averaging 926 pounds sold for $334.

In central Saskatchewan, larger frame Angus cross steers with lighter butter levels with a mean weight of 835 pounds were last bid at $390.  In the same region, lower flesh Simmental based heifers averaging 860 pounds were last bid at $352.

Southeast of Calgary, larger-wide frame Limousin steers weighing just over 700 pounds were valued at $440. North of Calgary, medium to larger frame mixed heifers with a mean scale number of 720 pounds supposedly sold for $395.

In Manitoba, Charolais based steers averaging 625 pounds reportedly settled at $463. In north-central/central Saskatchewan, Charolais steers on the card at 630 pounds reached up to $497 and British based medium frame steers around 615 pounds sold for $475.  Southeast of Saskatoon, medium frame run-of-the-mill mixed heifers weighing just over 600 pounds were valued at $425.

In central Alberta, Angus cross heifers weighing 560 pounds were valued at $464 and mixed black thin heifers averaging 500 pounds supposedly moved through the ring at $495. At the Ponoka sale, red mixed steers scaled at 584 pounds on light grain, barley and silage diet traded for $509.   At the Rimbey sale, a smaller package of mixed steers a shade over 500 pounds were last bid at $540.

The implementation of U.S. tariffs and Canadian retaliatory measures were delayed for 30 days at the last minute, but the threat remains.

President Trump believes that the U.S. trade deficit with Canada suggests that Canadians have somehow, unfairly taken advantage of Americans. Apparently, Canadians have been smarter and outtraded our American counterparts. President Trump feels that tariffs are imperative to level the playing field.  Beef demand is inelastic. A small change is supply has a large influence on price. Wholesale beef prices have been trading at or near historical highs over the past month as U.S. and Canadian packers anticipate the tariffs.  The U.S. border is currently closed to Mexican feeder cattle which is enhancing prices.  A tariff on beef and cattle will drive U.S. beef prices to unprecedented levels so fresh tariffs may not have much of an influence on the feeder market.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com. 

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Trump said his tariffs on the three largest U.S. trading partners, which take effect on Tuesday, might cause Americans some short-term pain, but “long term, the United States has been ripped off by virtually every country in the world”.

Global stock markets and currencies tumbled over concerns that the tariffs would trigger an economically damaging trade war. Futures for Wall Street’s S&P 500 fell more than 1.7 per cent before the opening bell, on the heels of the year’s biggest daily losses on a string of Asian and European bourses.

Speaking in Washington on Sunday after returning from his Mar-a-Lago estate, Trump indicated that the 27-nation European Union would be next in the firing line, but did not say when.

“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them,” he told reporters.

EU leaders meeting at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the U.S. imposes tariffs, but also called for reason and negotiation.

Arriving at the talks, French President Emmanuel Macron said if the EU were attacked in its commercial interests it would have to “make itself respected and thus react”.

Chancellor Olaf Scholz of Germany said the bloc could respond if necessary with its own tariffs against the U.S., but stressed it was better for the two to find agreement on trade.

Trump hinted that Britain, which left the EU in 2020, might be spared tariffs, saying: “I think that one can be worked out”.

The U.S. is the EU’s largest trade and investment partner. According to the Eurostat data from 2023, the United States had a deficit of 155.8 billion euros ($161.6 billion) with the EU in the trade of goods, offset by a surplus of 104 billion euros in services.

EU foreign policy chief Kaja Kallas said there were no winners in a trade war, and if one broke out between Europe and the United States, “then the one laughing on the side is China”.

TUESDAY DEADLINE

The tariffs on Canada, Mexico and China, outlined in three executive orders, are due to take effect 12:01 a.m. EST  on Tuesday.

Trump said he would speak on Monday with the leaders of Canada and Mexico, which have both announced retaliatory tariffs of their own, but downplayed expectations that they would change his mind.

“They owe us a lot of money, and I’m sure they’re going to pay,” Trump told reporters.

White House National Economic Council Director Kevin Hassett suggested Washington was more satisfied with Mexico’s response so far than Canada’s. He told CNBC that Mexico appeared to be “very, very serious about doing what President Trump said,” but the “Canadians appear to have misunderstood the plain language of the executive order”.

Economists said the Republican president’s plan to impose 25 per cent tariffs on Canada and Mexico and 10 per cent tariffs on China would slow global growth and drive prices higher for Americans.

Trump says they are needed to curb immigration and narcotics trafficking and spur domestic industries.

Financial market reaction on Monday reflected concerns about the fallout from a trade war. Shares in Tokyo ended the day down almost three per cent and Australia’s benchmark — often a proxy trade for Chinese markets — dropped 1.8 per cent. The mainland China market was shut for Lunar New Year holidays.

Around lunchtime in Europe, Germany’s DAX index was down two per cent, France’s CAC down 1.9 per cent and Britain’s FTSE 100 down 1.3 per cent.

The Chinese yuan, Canadian dollar and Mexican peso all slumped against a soaring dollar. With Canada and Mexico the top sources of U.S. crude oil imports, U.S. oil prices jumped more than one per cent, while gasoline futures rose nearly three per cent.

Trump’s tariffs will cover almost half of all U.S. imports and would require the United States to more than double its own manufacturing output to cover the gap — an unfeasible task in the near term, ING analysts wrote.

Other analysts said the tariffs could throw Canada and Mexico into recession and trigger “stagflation” — high inflation, stagnant growth and elevated unemployment — at home.

In Europe, economists at Deutsche Bank said they were currently factoring in a 0.5 per cent hit to gross domestic product (GDP) should Trump impose 10 per cent tariffs on the bloc.

NATIONAL EMERGENCY

A White House fact sheet gave no details on what Canada, Mexico and China would need to do to win a reprieve.

Trump vowed to keep the sanctions in place until what he described as a national emergency over fentanyl, a deadly opioid, and illegal immigration to the U.S. ends.

China called fentanyl America’s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.

Mexican President Claudia Sheinbaum vowed resilience and said she would provide more details on Monday of the retaliatory tariffs she ordered on the weekend. Canada said it would take legal action under the relevant international bodies to challenge the tariffs.

Automakers would be particularly hard hit, with new tariffs on vehicles built in Canada and Mexico, burdening a vast regional supply chain where parts can cross borders several times before final assembly.

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The Environmental Protection Agency (EPA), which has the authority to issue the exemptions, denied 26 petitions from 15 small refineries who applied for waivers for the 2016-2018 and 2021-2023 compliance years, the agency said on Friday. There are still two pending petitions.

The agency also disclosed which oil refiners submitted petitions in July 2022 or later, as well as which oil refiners are participating in an alternative compliance schedule that allows them flexibility in complying with biofuel blending laws.

Under the Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into the nation’s fuel mix, or buy tradable credits from those that do. The EPA can, however, award exemptions to some small refiners if they prove that the obligations cause them undue harm.

Biden has been trying to set the United States on track to reduce carbon emissions in the fight against climate change, with a goal of net-zero emissions by 2050.

The administration has not yet extended a waiver to any refinery, reversing the policy of former President Donald Trump, whose administration granted 34 exemptions to oil refiners for the 2017 compliance year alone.

The EPA consulted with the Department of Energy on Friday’s waiver decisions and found that none of the petitioning small refineries demonstrated they face disproportionate economic hardship caused by their RFS compliance, the agency said.

New transparency

The EPA publicized on Friday the names of refiners that submitted small-refinery exemption petitions from July 2022 or later. The agency added this information to its website to reflect its commitment to transparency around RFS decisions, it said.

Refiners that submitted petitions included Calumet Montana Refining and Ergon Refining. Their petitions were denied.

The agency also publicized the names of refiners that are using an alternative schedule to prove RFS compliance. Among those listed were Sinclair Wyoming Refining Company and Kern Oil and Refining Company.

Data from the EPA showed 17 small refineries have opted into the alternative compliance schedule for the 2020 compliance year, the only compliance year shown in the data. The group had retired 360 million credits to show compliance, and had 510 million credits outstanding, EPA’s website showed.

— Stephanie Kelly is a Reuters correspondent covering the U.S. oil industry from New York City.

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The proposal put forward by Quality Pork Processors, operator of a large Minnesota slaughterhouse, and union officials could benefit companies such as WH Group’s Smithfield Foods and JBS USA, the North American unit of Brazilian meatpacker JBS SA.

Faster slaughtering would help them increase pork production at a time of high demand and soaring bacon prices.

Seven pork plants were initially able to operate without limits on line speeds after a 2019 U.S. Department of Agriculture rule change that did not need congressional approval. Six of the plants had previously received waivers to run at a faster pace.

A federal judge in March invalidated the policy and forced the plants to slow down following a United Food and Commercial Workers (UFCW) union lawsuit against USDA over concerns about worker safety.

The second-biggest U.S. pig producer, Seaboard Foods, which did not previously have a waiver, sped up an Oklahoma pork plant last year under the 2019 rule. Workers told Reuters the faster line speeds increased injuries, and there were not enough employees to run faster production lines safely.

Under the new proposal, Quality Pork Processors would be able to speed up again if USDA and unions agree staffing levels are high enough, said Richard Morgan, president of the UFCW local that represents the plant’s workers. He said staffing levels could be monitored daily.

“The number of staffing would dictate what the line speed can be that day,” he said. “It’s all about the staffing.”

USDA Secretary Tom Vilsack said last week USDA was considering Quality Pork Processors’ proposal and that it could create the structure for waivers for five other facilities. He did not give details but seemed to refer to the facilities with waivers prior to the 2019 rule.

“I’m happy that they are tying the line speeds to worker safety, but this is all backroom dealings and does not appear to take into consideration food safety whatsoever,” said Zach Corrigan, senior staff attorney for Food and Water Watch.

The federal Occupational Safety and Health Administration (OSHA) did not immediately respond to a request for comment.

USDA did not respond to subsequent questions, nor did Quality Pork Processors respond to requests for comment.

Workers at the company’s plant would have more time off and be able to meet production goals more quickly if line speeds and staffing levels increase again, Morgan said. He noted that the workers, who are paid hourly, have been working six days per week to meet production targets.

The plant’s maximum slaughtering capacity dropped by about seven per cent, to 17,700 pigs per week, after the court decision took effect, said Steve Meyer, economist for consultancy Partners for Production Agriculture.

Nationally, the pork industry has lost 2.5 per cent of its slaughtering capacity, the National Pork Producers Council said.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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The U.S. Court of Appeals for the District of Columbia Circuit ruled that the Environmental Protection Agency (EPA) exceeded its authority by lifting summertime restrictions on the sale of a 15 per cent ethanol fuel blend known as E15. The decision came in a lawsuit by an oil refining trade group challenging the rule.

The EPA in 2019 extended a waiver that allowed year-round sales of E15. Ethanol producers cheered that move, as it would allow expanded sales of the blend.

The American Fuel and Petrochemical Manufacturers (AFPM), which sued the EPA, welcomed the D.C. Circuit’s ruling.

“There is no ambiguity in statute and the previous administration’s reinterpretation overstepped the will of Congress,” AFPM president Chet Thompson said in a statement.

Biofuel groups said they disagreed with the ruling and vowed to work with President Joe Biden’s administration to ensure the continuity of E15 sales through the 2021 summer season and beyond.

“We are pursuing all available options and will work with the administration and our congressional champions to ensure that we have a solution in place before the 2022 driving season,” Growth Energy, the Renewable Fuels Association and the National Corn Growers Association said in a joint statement.

— Stephanie Kelly reports on U.S. energy and renewable fuel sectors for Reuters from New York.

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The Depression-era program of up to $30 billion in annual funding was tapped by the Trump administration to distribute billions of dollars in aid to cover farmers’ lost sales due to trade wars, primarily with China (all figures US$). Now it could help advance a Biden policy priority: combating climate change.

The CCC funds could be used to create a market to trade carbon or help farmers adopt sustainable agriculture practices, Vilsack said during his Senate confirmation hearing. Those green programs could then be incorporated and expanded in future farm bills, he said.

“It is a great tool for us to create the kind of structure that will inform future farm bills about what will encourage carbon sequestration, what will encourage precision agriculture, what will encourage soil health and regenerative agricultural practices,” Vilsack said.

Biden has already signed a raft of climate-related executive actions, including a pause on new oil and gas leases on federal land, rejoining the Paris climate accord and setting a target for reducing U.S. greenhouse gas emissions by 2030.

A handful of private projects launched recently by the likes of Cargill and Bayer have tried to compensate growers for sustainable agriculture practices. Many farmers, however, have been reluctant to make the shift due to high upfront costs for uncertain or minimal returns.

The CCC was established nearly a century ago and has the authority to borrow up to $30 billion from the U.S. Treasury to help stabilize and support farm income and agricultural product prices.

Farm subsidies soared under Trump, with farm aid packages and other government support schemes accounting for almost 40 per cent of farm income last year, a two-decade high.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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The decision came after appeals by refining companies that argued the 10th Circuit Court’s decision last year had improperly deprived them of a method to avoid financial hardship granted by Congress.

Under the U.S. Renewable Fuel Standard, refiners must blend billions of gallons of corn-based ethanol and other biofuels into their fuel or buy credits from those that do — a law meant to help farmers and reduce dependence on foreign oil.

But small facilities under financial stress can also seek waivers from the obligation, and the Trump administration has dramatically ramped up the number of such exemptions granted to the industry — angering biofuel producers that claim the waivers undercut demand for their products.

After a challenge from biofuel industry groups, the 10th Circuit ruled last January that the U.S. Environmental Protection Agency can only grant the so-called Small Refinery Exemptions to facilities that have received them continuously each year since 2010. That decision cast doubt over the entire waiver program, since most of the refineries securing waivers in recent years have not secured them continuously.

“We are disappointed in the Supreme Court’s decision to review the case but will continue to vigorously pursue a resolution to the damage that small refinery exemptions do to the biodiesel industry,” said Kurt Kovarik, spokesman for the National Biodiesel Board.

The Fueling American Jobs Coalition, which advocates on behalf of refiners, cheered the Supreme Court’s decision, saying the review comes at an “urgent time” for refiners battered by the economic downturn.

The court is expected to hear the case in April, and a ruling could take several months.

— Reporting for Reuters by Stephanie Kelly; writing by Richard Valdmanis.

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