Tariff Trouble Takes Root in America’s Fields

25% duty on Canadian potash fuels rising costs and reshapes crop strategy across agriculture sector

7 Mar 2025

A 25 per cent tariff on Canadian fertilizer imports imposed in February has unsettled the US agriculture sector, driving up costs and prompting a reassessment of supply chains. The levy targets potash, a key crop nutrient that the US imports largely from Canada, triggering price increases and forcing farmers to seek alternatives.

Potash prices have risen from $303 to $348 per short ton between January and late February, compounding pressures on growers already burdened by inflation and volatile commodity markets. Many are shifting towards crops with lower fertilizer needs, a trend that is beginning to alter planting patterns nationwide.

Producers are adjusting rapidly. CF Industries and Nutrien are revisiting sourcing and contract structures, while smaller fertilizer firms face narrowing margins. Industry groups have urged Washington to reconsider the tariffs, warning that the policy could jeopardise both food security and the wider rural economy.

“This goes beyond fertilizer. This is about preserving the backbone of American agriculture,” said a policy adviser at The Fertilizer Institute.

Analysts expect consolidation to accelerate as companies pursue scale and domestic capacity to offset trade risks. Although no major deals have been announced, several mid-sized producers are reportedly exploring mergers with larger counterparts.

Efforts to strengthen domestic resilience are gaining traction. Farmers, manufacturers and advocacy organisations are calling for more flexible trade rules, greater investment in local production, and innovations to improve efficiency across the supply chain.

While the short-term impact has been severe, some see opportunity in the disruption. Industry analysts argue that the crisis could drive structural reform and long-term sustainability in US fertilizer production.

As one market observer noted, “The winners of this moment will define the future of US farming.”