Donald Trump says he is ready to slap “very severe tariffs” on fertilizer crossing the 49th parallel if Ottawa fails to meet his border-security demands, a warning he delivered at the White House.
“A lot of it does come in from Canada, and so we’ll end up putting very severe tariffs on that, if we have to, because that’s the way you want to bolster here,” Trump said.
The U.S. president did not give a rate, but his administration has already used a 25 percent benchmark on steel, aluminum and most other Canadian exports.
Potash, nitrogen and phosphate shipments now move tariff-free under the Canada-U.S.-Mexico Agreement, so any new duty would mark a sharp break with the trade pact.
Fertilizer flows run both ways
Canada supplies more than 80 percent of the potash spread on U.S. fields, while American producers send roughly one-quarter of the phosphate used by Prairie growers, federal trade data show.
A 25 percent charge on Canadian potash would add about US$100 a tonne to landed costs, according to an early February analysis by the University of Illinois and Ohio State University, pushing up corn and soybean budgets just as farmers place seed orders for the 2026 crop.
Saskatchewan Premier Scott Moe said American producers “need Canadian fuel and fertilizer to grow their crops” and warned that tariffs will lift grocery bills on both sides of the border.
Ottawa has already signalled it would mirror any move on fertilizer. That could leave Canadian growers paying more for U.S. phosphate and for nitrogen products that move north by rail from plants in Iowa, Louisiana and Texas. The Canadian Federation of Agriculture argues that no one wins. “Tariffs are simply bad business,” president Keith Currie said.
Nutrien, Mosaic face tough choices
Nutrien earns about 61 percent of its revenue in the United States, or roughly US$18 billion a year, according to a March report on tariff exposure by BNN Bloomberg. The Saskatoon-based miner has already warned that duties would backfire.
“The cost of this would be borne by the U.S. farmer,” chief executive Ken Seitz told analysts on a February results call. Potash is a bulky commodity, so alternatives such as Russian or Belarusian cargoes would face longer hauls and sanctions hurdles, leaving Midwest buyers with few quick substitutes.
Mosaic’s Esterhazy mine in Saskatchewan and U.S. nitrogen giant CF Industries, which owns nitrogen plants on both sides of the border, would also have to rethink logistics.
Analysts at RBC Capital Markets estimate that every US$30 a tonne change in delivered potash prices shifts Nutrien’s annual earnings before interest, taxes, depreciation and amortization by about US$450 million. Tariffs could swing that by more than twice the amount, depending on how much of the surcharge sticks in the U.S. market.
Traders on Bay Street have started to price in the risk. Nutrien shares fell on the Toronto Stock Exchange in the week after Trump’s remarks.Bank of Canada officials say it is too early to adjust their inflation forecast, but a material increase in fertilizer and food costs would complicate their path back to the two per cent target. The next rate decision is set for Jan. 28, and Governor Tiff Macklem has already flagged trade uncertainty as a downside risk.
For now, spring application is safe. Most U.S. wholesalers booked Canadian potash months ago, and railcars are rolling south. The real test will come later, when growers on both sides of the border decide what, and how much, to plant for 2026.
