On Jan. 31, 2025, the White House announced a 25% import tariff on products from Canada and Mexico that was set to take effect on Feb. 1 but was soon after delayed for one month. Before the pause, Canada announced retaliatory tariffs on several agricultural products including peanut butter. Then on Feb. 10, President Trump announced a 25% tariff on aluminum and steel imports, and the European Union responded with a list of products that could be targeted with retaliatory tariffs, also including peanut butter. The recent trade disputes raise the question of how U.S. peanuts could potentially be affected.
While the United States only produces about 5% of the world’s peanuts, it exports 14%. In the 2023/2024 marketing year, 22% of the 3.27 million tons of peanuts that the United States produced were exported to other countries. In contrast, 58% of U.S. peanuts went to domestic food production.
The United States also exports significant amounts of processed peanuts, including peanut butter, which totaled over $256 million in the 2023/2024 marketing year. Thus, while export markets are not the largest destination for U.S. peanuts, they are still a significant portion, and the United States is a major peanut exporter.
Top Export Markets
Figure 1 shows the top destinations for U.S. exported peanuts and processed peanut products over the past five marketing years. Mexico has been the top export destination for raw U.S. peanuts each of the past three years at an average of 147,000 tons of peanuts per year. Canada ranks second over the same period, at 112,000 tons, on average. In the 2023/2024 marketing year, the European Union had a 126% increase in peanut imports from the United States, totaling 142,000 tons. Lastly, China was the largest export destination from 2019-2021 but has decreased its peanut imports for the past three years.
Overall, Mexico, Canada, China and the European Union account for 90% of raw U.S. peanut exports. In contrast, 57% of U.S.-processed peanut exports have gone to Canada and Mexico over the past five marketing years. The European Union nearly quadrupled its imports of processed peanut products from the United States this past marketing year. In summary, any reduction of U.S. raw or processed peanut exports to Canada, Mexico and the European Union could present challenges to the U.S. peanut industry.
Trump Lifts Tariffs On Imports Of Canadian And Mexican Products
The tariff situation was changing on nearly a daily basis in February and March as discussions amongst the three countries took place, and the American Peanut Council did their best to keep members informed on the situation. In a follow up to their report on March 4 and two days after applying 25% tariffs on imports from Canada and Mexico, President Trump lifted those tariffs effective 12:01 a.m. March 7. The exemption applies to any imports from Mexico and Canada that meet the rules of origin established by the US-Mexico-Canada Agreement. In general, if the product is grown and processed in the United States, Mexico or Canada, the final product will meet the required rules of origin.
President Trump’s executive order clarifies that if imports of potash from Canada and Mexico, or energy from Canada, do not meet the USMCA rules of origin, a 10% tariff will apply. Companies should consult their custom brokers and importers to confirm imports are exempt and have any required documentation. The suspension of the U.S. tariffs is expected to be reviewed by early April.
Canada does not plan to lift the retaliatory 25% tariffs on $30 billion of U.S. goods, including U.S. peanut butter, prepared peanuts and peanut oil. Prime Minister Trudeau has stated those tariffs will remain in place while the United States imposes tariffs on Canadian goods. In addition to the U.S. tariffs on imports from Canada that do not meet USMCA rules of origin, the United States is set to impose 25% tariffs on imports of Canadian steel and aluminum on March 12.
In addition, on March 7, Canada issued a notice on its second list of $125 billion of U.S. products, including raw peanuts, extending the public comment period until April 2, 2025. Canada provided a process for companies to seek a “remission” or exemption from the tariffs.
