Fertilizers are exempt from new tariffs on Canadian goods

This week, potash and other fertilizers will be exempt from new import tariffs on Canadian goods.

U.S. President Donald Trump signed three new orders on July 20 under Section 338 of the Customs Act of 1930, imposing 50% import tariffs on certain Canadian goods. The new tariffs will apply to a range of goods, including some items covered by the U.S.-Mexico-Canada Agreement.

Fertilizer products such as potash, sulfur, and sulfuric acid are not included in the list of tariff lines covered by the orders.

The Trump administration stated that it seeks to revise the U.S.-Mexico-Canada Agreement, which was concluded during Trump's first term. The U.S. Trade Representative's office decided on July 1 not to extend the agreement in its current form, meaning the three countries must conduct annual reviews and seek consensus for long-term extension after 2036.

The new tariffs under Section 338 will take effect on August 19, 30 days after signing.

The U.S. Department of Commerce recommends maintaining tariffs on Moroccan phosphate

The U.S. Department of Commerce today recommended imposing countervailing duties on imports of phosphates from Morocco, despite an eight-month suspension of this measure by President Donald Trump in June.

Based on preliminary findings of the five-year review, the department believes that lifting the order on countervailing duties on Moroccan phosphate fertilizers is likely to lead to continued subsidization. Today, the department stated that if the duty order is lifted, Moroccan producer OCP is likely to receive subsidies from Morocco amounting to 20.04%.

This figure is slightly higher than the initial 19.97% established during the original investigation, excluding the now-defunct export tax credit program but accounting for new subsidy programs identified in subsequent administrative reviews.

Last month, Trump temporarily suspended countervailing duties on certain shipments of Moroccan phosphate fertilizers for eight months or until the order is lifted, citing a "supply emergency" for American farmers. Since the suspension, no confirmed sales of Moroccan phosphate in the U.S. have been recorded.

Based on today's recommendation, it remains unclear how OCP will operate in the U.S. fertilizer market. The Department of Commerce determined that several Moroccan subsidy programs remain in effect and subsidies are expected to continue.

The subsidy rate of 20.04% mentioned in the department's report is not considered a new tariff rate but is a recommendation for review by the International Trade Commission.

The review began in early March and included American fertilizer producers Mosaic and Simplot, the Moroccan government, and OCP. Final results are expected around October 28, 240 days after the review began.

Since 2021, OCP and Russian fertilizer producers have faced countervailing duties on phosphate exports to the U.S. after Mosaic filed petitions claiming that imports from both countries cause material harm to the U.S. market.

The Department of Commerce also recommended continuing countervailing duties on imports of Russian phosphates in the final results of the five-year review, stating that Russian producers will also continue to receive subsidies.

According to the decision issued on June 30, the final subsidy rates of the department were 24.11% for Russian producer EuroChem, 14.64% for PhosAgro, and 16.64% for other companies.

The Department of Commerce also noted that the review process for Russia was expedited as domestic petitioners Mosaic and Simplot showed sufficient interest, while Russia did not respond or participate in the proceedings.

Many fertilizer traders were not surprised that Russia did not participate in the review, but they remain uncertain about OCP's next steps following the latest decision.