Trump threatens 25% tariffs on Mexico and Canada in move that could hurt horticulture

On Monday, Nov. 25 president-elect Donald Trump posted to his Truth Social app that he intended to impose tariffs of 25% on all products entering the United Sates from Mexico and Canada. The move, he explained would be one of "many first Executive Orders" that would occur on Jan. 20, Trumps first day of his second term in office. 

"... I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders," Trump wrote. "This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!"

Pressure on peat?

The emphasis on "all products" entering the country from our nearest trading partners is of particular concern for the horticulture industry. The majority of peat used by growers is sourced from Canadian peat bogs and imported to the states from the north. From the south, many growers receive plugs and starts produced in Mexico by plant brands. 

A 25% tariff on these products would increase input costs significantly. That is a major concern when it comes to peat. The cost of peat spiked significantly during the COVID-19 pandemic before stabilizing in the past year. A 25% tariff on peat paid by importers would inevitably increase the price of both raw peat and peat mixes crucial to the industry. Those costs would either have to be absorbed by growers or passed on to their customers by increasing plant prices.   

Industry responds

Greenhouse Management reached out to advocacy leaders from AmericanHort on Tuesday following the announcement. They expressed concern over the announcement, and stressed they will continue to work with political leaders to address potential consequences.

"AmericanHort is concerned about the impact these potential tariffs may have on the supply chain and the goods used by its members," explained Vice President, Advocacy and Government Affairs Matt Mika in a written statement. "We are engaging with the USDA, USTR, and the Commerce Department to assess how these tariffs will affect American agriculture and horticulture. Additionally, we are working with Members of Congress and relevant committees to address potential consequences for the agricultural supply chain. Many of our members are international dealers and customers, and these tariffs raise significant concerns, particularly given the experience with similar tariffs during the first Trump administration."

Advocacy groups outside of the horticultural industry have already sounded the alarm on Trump's tariff plans. The National Retail Federation released a report on Nov. 4, 2023 suggesting that proposed tariffs could casue American consumers to lose "$46 billion and $78 billion in spending power each year tariffs are in place."

“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold was quoted as saying in an NRF press release. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.” 

Fentanyl and immigration blamed

The incoming president was clear that the tariffs were retaliation for what he perceived to be a unrestricted flow of the drug fentanyl and illegal immigrants into the United States. But recent data is at odds with president-elect Trump's statements. 

In terms of fentanyl smuggling, The Department of Homeland Security has noted that the vast majority of the drug is seized from American citizens during legal border crossings. In a March 2024 release the department reported "More than 90% of interdicted fentanyl is stopped at Ports of Entry (POEs) where cartels attempt to smuggle it primarily in vehicles driven by U.S. citizens.'

It is unclear how tariffs would decrease smuggling through points of entry by American citizens.

There is also conflicting information regarding illegal immigration across what the president elect has characterized as "open borders." In a Nov. 19 news release, United States Customs and Border Control report that border crossings are on the decline. 

"Since the June 4 Presidential Proclamation on Securing the Border and accompanying Interim Final Rule, which was finalized Sept. 30 subsequent to an updated Proclamation, went into effect, there has been a continued, meaningful decrease in unlawful border crossings," the department reported. "Including a more than 55% decrease in encounters between ports of entry along the southwest border through Nov. 19."

While the tariffs are threatened, they will not be in effect until an executive order is signed. This story is dynamic and ongoing and will be updated as new information or comments are received.