This article was originally published at 1:35 p.m. CDT on Friday, Jan. 31. It was last updated with additional information at 4:28 p.m. CDT on Friday, Jan. 31.

**

OMAHA (DTN) -- President Donald Trump said Friday he will impose 25% tariffs starting Saturday on an unknown list of products from Canada and Mexico, and a 10% tariff on products from China.

Grain, dairy and oil markets all reacted negatively Friday to news Trump would place 25% tariffs on Canada and Mexico as soon as Saturday.

Speaking to reporters in the White House on Friday afternoon Trump said he tariffs would bring more money into U.S. coffers. He cited fentanyl, border crossings and trade deficits as reasons for the tariffs.

"It's pure economics. We have big deficits with all three of them," Trump said.

Trump said there will be tariffs on steel and aluminum, and later there will be tariffs on copper and computer chips.

Tariffs on oil and gas are likely to come later in February and be 10%.

"I'm probably going to reduce the tariff a little bit on that. I think we're going to bring it down to 10% on the oil," Trump said.

He also said China had committed to buying $50 billion a year in farm products but former President Joe Biden didn't enforce it. "We're going to enforce it."

White House Press Secretary Karoline Leavitt, in a briefing earlier, said the tariffs would go into effect Saturday. "Starting tomorrow those tariffs will be in place."

Leavitt said the list of products targeted by the tariffs will be released Saturday.

Leavitt also pushed back on questions that tariffs could lead to higher prices for consumers.

"I think Americans who are concerned about increased prices should look at what President Trump did in his first term," she said, pointing to inflation under 2% during his term.

Leavitt added, "He will continue to effectively implement tariffs while cutting inflation and costs for the American people."

The American Farm Bureau Federation sent a letter to Trump cautioning that new tariffs "may inadvertently create financial hardships on U.S. farmers and ranchers."

AFBF noted farmers are historically targets of retaliatory tariffs.

Early Friday, corn, wheat and soybean prices for the March CME contract were down in anticipation of tariffs. Prices rallied throughout Friday until Leavitt's press conference. Corn and wheat prices immediately began falling.

Corn and wheat could be especially affected by retaliatory tariffs from Mexico, which is the top export market for both grains. Soybeans would be affected more by retaliatory tariffs by China.

Robin Schmahl, DTN's dairy analyst, also noted Class III milk futures came under substantial pressure late Thursday and continued that pressure overnight, opening lower Friday. Traders are reacting to the fear of reduced dairy product exports.

DTN's energy reporters noted oil futures inched down Friday morning, as market participants continued in a wait-and-see mode.

DTN analysts also noted ethanol margins are expected to see further pressure on concerns over exports to Canada with reports of a plant being idled in Minnesota.

Stock indexes such as the Dow Industrials, S&P 500 and NASDA also began to decline after Leavitt began talking shortly after noon Central. Each ended down for the day.

Trump was also asked if he would eventually impose tariffs on Europe. "Absolutely."

Trump added, "Tariffs don't cause inflation. They cause success -- big success."

CANADA EXPECTS TO RESPOND

Canadian Prime Minister Justin Trudeau vowed Friday to respond immediately if the U.S. moves ahead with tariffs. "It's not what we want, but if he moves forward, we will also act," Trudeau said.

A former chief trade negotiator for Canada, Steve Verheul, talked about the risks to trade earlier this week at the American Farm Bureau Federation annual meeting. Canada would go into a recession almost immediately, Verheul said.

Canada would impose "dollar for dollar" tariffs and agriculture would become a "prime target," Verheul said.

"We don't want to go down that road," Verheul said. "It's going to hurt U.S. farmers too because we're going be forced to do some things and we don't want to do it."

If the 25% tariffs become a reality, U.S. farmers would struggle to find potash, or they would have to turn to Russia. Canada provides 87% of U.S. potash, which is about 11 million metric tons per year.

While Trump has talked about the U.S. trade imbalance, Verheul said the U.S. trade deficit is driven mainly by imports of oil and natural gas, and electricity transmitted across the border. Those energy exports, however, do provide Canada some leverage if Trump imposes tariffs, Verheul said.

CANADA AND AG TRADE

As DTN has reported, the U.S. exported $28.4 billion in agricultural products to Canada in 2023. Through November 2024, U.S. agricultural exports were $26.2 billion, staying on pace with a year earlier.

In 2023, the U.S. imported $40.4 billion in agricultural commodities from Canada. Through November 2024, that number stood at $37.7 billion, up 1% from a year earlier.

U.S. baked goods, fresh vegetables, fruit, ethanol, processed food, dairy products and pet food are all billion-dollar export products to Canada, USDA data highlights. Canada is the largest export market for U.S. baked goods at $2.8 billion in sales in 2023. Canada also was the top market for U.S. vegetables at $1.97 billion.

At $1.74 billion, Canada is the largest buyer of U.S. ethanol, topping all other markets fourfold.

U.S. buyers have brought in 730,409 head of cattle from Canada through the first 11 months of 2024. Most of those cattle go directly to slaughter.

In turn, Canada is the No. 5 market for U.S. beef exports. Through November 2024, the U.S. has exported $824 million in beef to Canada, up 2% from a year ago, according to the U.S. Meat Export Federation.

Canada also has sent 3.4 million pigs to U.S. farmers through November 2024, primarily to producers in Iowa and Minnesota.

Turning pigs into pork, Canada is the No. 5 market for U.S. pork through November at $782 million, down 2% from 2023, according to USMEF.

Canada also is the No. 3 market for poultry exports at nearly $504 million in 2023, according to USDA.

MEXICO AND AG TRADE

The U.S. exported $28.3 billion in agricultural products to Mexico in 2023. Through November, ag exports to Mexico for 2024 were $27.7 billion, up 7% from a year ago.

Mexico's agricultural exports to the U.S. topped $45.5 billion in 2023. Through November, Mexico's ag exports to the U.S. for 2024 were $45 billion, up 7% from a year ago.

Mexico is the top market for U.S. corn, pork, poultry, dairy products and wheat.

Corn exports to Mexico are king, valued at just under $5.4 billion in 2023.

For the corn marketing year, which started in September, USDA shows corn sales to Mexico at 7.1 million metric tons, which makes up nearly 43% of all corn exports. Sales to Mexico were up 13% compared to a year ago.

Pork exports to Mexico are valued at $2.3 billion through November, up 10% from a year ago, according to USMEF reports.

Before the import ban in November, the U.S. had imported more than 1.2 million cattle from Mexico in 2024, according to USDA.

Mexico is the No. 4 market for beef exports. Through November 2024, the U.S. has exported $1.2 billion in beef to Mexico, up 14% from last year.

Mexico was the top market for poultry exports in 2023 at $1.26 billion, according to USDA.

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

Follow him on social platform X @ChrisClaytonDTN

(c) Copyright 2025 DTN, LLC. All rights reserved.