WESTERN FARM REPORT

Market Intelligence Series — Paid Tier

TARIFF WATCH  |  Week of April 13, 2026

India Reverses Course — Yellow Peas Restored to Duty-Free Access Through March 2027

India’s Ministry of Finance issued a notification on April 4, 2026 extending duty-free imports of yellow peas until March 31, 2027. The decision reversed the 30% import duty imposed on November 1, 2025, restoring the zero-duty access that had been in place (with periodic extensions) since late 2023. India is the world’s largest importer of yellow peas and Canada’s most critical alternative pulse market after China imposed its 100% retaliatory tariff on Canadian peas in March 2025. The November 2025 duty had hammered yellow pea prices — Saskatchewan yellow pea bids fell as much as 43% from early-March 2025 levels by late October 2025, according to Saskatchewan Agriculture data reported at the time. The April 4 reversal is the most market-relevant new tariff development of the week and comes as Prairie producers are finalizing spring seeding allocations.

The context for the reversal is India’s domestic pulse market dynamics. Domestic prices for pigeon peas and chickpeas in India have been under pressure from weak demand and ample carryover stocks accumulated during years of below-MSP prices. Yellow peas, imported at ₹40–50 per kilogram, were substituting for higher-priced domestic pulses and contributing to the price depression. The 30% duty had been intended to protect Indian farmers from import competition. However, pigeon pea production in 2025/26 came in short of expectations, reversing the price dynamic and reducing political pressure to maintain the duty. India is simultaneously managing food inflation concerns — pulse prices directly affect food security for lower-income households — and the Ministry of Finance prioritized supply security over farm income protection for the current period. The duty-free extension runs until March 31, 2027, but India’s track record on pulse tariff policy shows the government will adjust the rate without advance notice if domestic conditions change (USDA FAS India pulse policy notifications; Western Producer, January 2026).

Prairie producers who shifted pea seeding area downward for 2026 — AAFC projected pea seeded area falling 15% to 2.96 million acres due to low returns and market access uncertainty — will not recover those acres for the 2026 season. The duty-free extension does provide better marketing prospects for 2025-crop peas still in storage and will likely support pea prices modestly through Q2 and Q3 2026. Canada’s major competitors in the Indian pea market are Russia and Australia; all three origins benefit equally from the duty-free access window.

Active Tariff Regime Summary — Prairie Agriculture

The table below maps every currently active tariff measure with material implications for Prairie grain, oilseed, pulse, and livestock producers, as of April 13, 2026. Sources: Government of Canada Trade Commissioner Service tariff summary (updated April 2026); Canola Council of Canada tariff tracker; USDA FAS Canada attaché reports; Government of India Ministry of Finance notifications.

Regime-by-Regime Analysis

U.S. Section 232 — The Steel and Aluminum Wall With No Agriculture Exemption

The U.S. Section 232 tariffs on steel and aluminum, now at 50% after being doubled in June 2025, represent a persistent input cost pressure on Prairie producers that operates independently of grain export tariff exposure. There is no CUSMA exemption for Section 232 tariffs on steel, aluminum, or copper — Canadian-origin steel and aluminum pay the same 50% rate as any other country. The April 2 presidential proclamation expanded the tariff base further: duties now apply to the entire customs value of covered articles, not just the metal content, effective April 6, 2026 (Congressional Research Service Tariff Timeline; C.H. Robinson trade advisory, April 6, 2026).

For Prairie agriculture, Section 232’s practical bite is in inputs. Grain bins, grain handling equipment, irrigation pivots, machinery components, and farm infrastructure all incorporate steel and aluminum. Procurement of new U.S.-origin steel or aluminum equipment now carries a 50% surcharge that is not exempted under CUSMA. Canadian-produced agricultural equipment using imported U.S. steel content similarly faces cost pressure. The Canadian government has maintained tariff remissions on U.S. steel used for agricultural production, food and beverage packaging, and manufacturing — these remissions were extended through June 30, 2026 for aluminum and January 31, 2026 for steel used in agricultural production (Blakes tariff timeline, March 2026). Operators planning capital equipment purchases through 2026 should verify current remission eligibility before procurement.

Canada’s counter-tariff of 25% on C$15.6 billion worth of U.S. steel and aluminum imports remains in force, consistent with the Government of Canada’s stated position that Canadian retaliatory tariffs on steel, aluminum, and autos will remain until the U.S. removes its Section 232 measures on Canada (Government of Canada, Canada’s Response to U.S. Tariffs page, updated April 2026). This bilateral standoff on steel and aluminum is the one tariff file that has not moved toward resolution through 2025-2026, and it has no natural expiry mechanism — both sides have linked removal to a reciprocal commitment the other has not yet made.

U.S. Section 122 — The 150-Day Tariff Bridge and the July 24 Expiry

The U.S. Supreme Court ruling of February 20, 2026 — invalidating IEEPA as a tariff authority in the case Learning Resources, Inc. v. Trump — eliminated the legal basis for the 35% tariff on non-CUSMA-compliant Canadian goods that had been in effect since mid-2025. Within 24 hours, President Trump invoked Section 122 of the Trade Act of 1974, imposing a 10% global surcharge on most imports effective February 24, 2026. CUSMA-compliant goods are exempt. Energy products and fertilizers are also explicitly exempt (Congressional Research Service, U.S.-Canada Trade Relations fact sheet, April 2026).

Section 122 carries a statutory hard ceiling of 150 days and requires Congressional authorization to extend beyond that limit. The current Section 122 tariffs expire July 24, 2026. The Trump administration has publicly stated that the 150-day period is intended as a bridge while Section 301 investigations are concluded and new tariff authorities are constructed. The Office of the U.S. Trade Representative launched Section 301 investigations into trading practices of 60 partners — including Canada — on March 11, 2026 (Grant Thornton tariff advisory, March 2026). Section 301 investigations typically require public comment periods and agency reports before tariffs can be implemented; the pace of this investigation will determine whether new tariffs are ready before or after the July 24 Section 122 expiry.

For CUSMA-compliant Prairie agricultural exports — wheat, canola, pulses, beef, pork — the Section 122 tariff has no direct cost impact. These exports enter the U.S. duty-free under CUSMA rules of origin regardless of Section 122. The agricultural risk from Section 122 is collateral: if the investigative and political pressure during the 150-day window elevates to a point where Canada and the U.S. cannot agree on terms for CUSMA renewal at the July 1 joint review, the subsequent tariff environment for agricultural goods becomes uncertain. The July 24 Section 122 expiry and the July 1 CUSMA review trigger are separated by only 23 days — the two events are effectively simultaneous from a trade policy risk management perspective.

China Canola Regime — Seed, Meal, and Oil: Three Different Answers

China’s tariff treatment of Canadian canola now has three distinct components, each on a different legal and temporal footing, producing a trade access structure that is more complex than any prior bilateral canola relationship. Canola seed carries a 14.9% combined rate — the 5.9% anti-dumping duty from the February 28 MOFCOM final determination plus the 9% MFN rate — for a fixed five-year term from February 28, 2026. This five-year duration is standard under WTO anti-dumping rules and means the canola seed rate cannot be reduced until a review is conducted at the five-year mark in 2031, absent a political agreement to accelerate relief. The Canola Council of Canada and the Canadian government have stated they will continue pursuing permanent elimination of the anti-dumping duty; however, that outcome requires China to conduct a new investigation or agree to terminate the measure through bilateral negotiation (Canola Council of Canada tariff tracker, updated March 2026; Government of Canada, Global Affairs backgrounder, January 2026).

Canola meal carries a 0% rate for the period March 1 through December 31, 2026, after the full 100% discriminatory tariff was suspended. Prior to this suspension, meal exports had fallen to an estimated 736,000 MT in the first ten months of 2025, compared to nearly 2 million MT annually in the three years before the 2025 tariff. The suspension is documented as temporary and is explicitly tied to the political arrangement negotiated during Prime Minister Carney’s January Beijing visit — not to a structural trade agreement. There is no automatic renewal mechanism. By late September 2026, market participants will need to assess whether renewal signals are present in the Canada-China bilateral relationship. The most operationally relevant deadline for Prairie canola producers marketing new-crop 2026 canola into Chinese meal demand is approximately 60 to 90 days before December 31 — meaning October to November 2026 is the window when canola meal tariff renewal risk is highest.

Canola oil remains fully subject to the 100% discriminatory tariff with no announced relief. In practice, China had already largely exited the Canadian canola oil market before the March 2025 tariff, as the U.S. Renewable Fuel Standard created sustained American demand for Canadian canola oil as a biodiesel feedstock. The U.S. EPA’s proposed Renewable Volume Obligations for 2026 and 2027, if finalized, would increase biomass-based diesel blending requirements by 67% from 2025 to 2026, providing an alternative demand sink that limits the practical impact of China’s canola oil closure. However, the 100% tariff ceiling on oil exports to China remains a ceiling that constrains future diversification options if U.S. renewable fuel policy changes.

China Yellow Peas and Canadian Pork — Partial Resolution, One File Still Open

China’s 100% retaliatory tariff on Canadian yellow peas, imposed in March 2025, has been suspended from March 1, 2026 to December 31, 2026. The tariff remains legally in force — the suspension is a ministerial action, not a treaty change. Canada’s largest historical customer for yellow peas prior to the dispute was China, which absorbed over $3.7 billion in Canadian pea exports from 2019 to 2024, according to Saskatchewan Pulse Growers data. AAFC projects 2025-crop pea carryout stocks at elevated levels reflecting the lost 2025 export pace. The restoration of access should support some improvement in pea pricing through 2026, though the suspension’s temporary nature limits confidence in multi-season pricing strategies built around Chinese demand.

Canadian pork exports to China remain subject to the 25% retaliatory tariff imposed in March 2025. Pork was specifically absent from the January 16, 2026 preliminary agreement and the subsequent February/March 2026 tariff adjustments. Canadian pork exports to China were down over 57% by value in the first ten months of 2025 compared to 2024, according to USDA FAS Canada attaché data. Manitoba in particular has significant exposure — the province’s hog industry is disproportionately dependent on offal and variety meat exports to Chinese markets. Provincial officials have been pressing Ottawa for resolution, and the Joint Canada-China Agriculture Committee revitalization announced in January 2026 may provide a forum for pork discussions. However, no timeline or trigger for pork tariff removal has been publicly announced (Government of Canada, Canada Secures Renewed Market Access with China, March 4, 2026).

India — Pulse Tariff Architecture After the Yellow Pea Reversal

India’s pulse import policy has oscillated between zero duty and 30% on yellow peas more than a dozen times since 2023, driven by the competing pressures of domestic farmer income protection and urban food affordability. The April 4, 2026 extension of zero-duty yellow pea access to March 31, 2027 is the sixth or seventh extension of this type. Each prior extension has been followed eventually by a reimposition of duties when domestic prices recovered. Prairie pea producers and traders should treat March 31, 2027 as a hard marketing planning deadline — forward contracts for pea delivery beyond that date carry duty reimposition risk that should be priced into basis and floor strategies.

The lentil tariff situation is structurally different. India’s 10% basic customs duty on lentils has been in continuous force since April 2025 and was expected by market analysts to escalate to 30% following the record 2025/26 rabi harvest (Western Producer, February 2026; AgPulse Analytica analyst consensus). As of publication date, the 10% rate remains in force; no formal 30% escalation notification has been issued, though the rabi harvest assessment is underway in April-May 2026 and a policy announcement could come with minimal advance warning. The arithmetic of the situation is straightforward: at a 30% duty, imported Canadian lentils land in India at approximately US$780/MT — marginally above India’s MSP of approximately US$771/MT — effectively pricing Canadian origin out of commercial Indian milling and dal processing markets. [Note: Verify current Saskatchewan lentil spot prices and India domestic lentil prices against AAFC field crop outlook and Statistics Canada data before publication.]

India’s stated ambition to achieve pulse self-sufficiency by 2028-29 — announced in the 2025-26 Union Budget — is a medium-term structural signal rather than an immediate trade barrier. But it signals that Canadian pulse access to India should be treated as a depleting resource over a five-year horizon, not a permanent structural market. The diversification strategies most often cited by pulse industry participants include Southeast Asian markets, the EU and UK (where Canadian lentils face no MFN tariffs and benefit from CETA in the EU), and domestic processing for plant protein food applications (Agriculture and Agri-Food Canada pulse sector analysis; Pulse Canada).

CUSMA Review — The Overarching Tariff Policy Variable

The July 1, 2026 mandatory joint review of CUSMA is the single largest policy event on the tariff calendar for Prairie agriculture. All currently active tariff privileges for CUSMA-compliant Prairie grain, oilseed, pulse, and livestock exports depend on the continuation of the CUSMA framework. Prime Minister Carney declared on March 5, 2026 that CUSMA has been ‘effectively broken in the short term by U.S. actions,’ a characterization that reflects both the legal disruption caused by the IEEPA tariff regime and the broader uncertainty about U.S. intentions for the agreement’s future.

The three options before the CUSMA parties at the July 1 review are renewal for another 16 years, withdrawal (requiring six months’ notice from any party), or continuation without renewal — which triggers annually renewable extensions through 2036 and adds structural uncertainty to every forward marketing decision Prairie producers make for U.S.-market delivery slots. U.S. agricultural producer groups have formed the Agricultural Coalition for USMCA and are actively lobbying the Trump administration for renewal. Canada is their natural ally in this coalition — both Canadian and U.S. farm organizations benefit from CUSMA’s tariff-free binational supply chain for grains, oilseeds, and livestock. The WTO dispute Canada filed against U.S. Section 232 tariffs in March 2025 (WTO case DS634: United States — Additional Import Duties on Goods from Canada) remains active and will be a pressure point in bilateral negotiations.

The dairy file continues to be the U.S.’s most-pressed agricultural demand in CUSMA negotiations. The U.S. International Trade Commission investigation into Canadian dairy protein exports — launched in July 2025 and with findings expected in March 2026 — provides Washington with specific leverage in the cheese and dairy TRQ administration dispute that USTR Greer identified in his December 2025 Congressional testimony as a priority concern. Canada enacted legislation in June 2025 explicitly preventing the government from increasing TRQs or reducing over-quota tariffs for dairy, poultry, or eggs in future trade negotiations. This legislative constraint limits Ottawa’s negotiating flexibility on dairy — the file where U.S. demands are most explicit (Congressional Research Service, U.S.-Canada Trade Relations, April 2026; U.S.-Canada Tariffs Timeline, Blakes LLP, March 2026).

Scenario Outlook

Four scenarios covering the tariff developments most material to Prairie producers over the next 60 to 90 days.

Historical Analogues

Section 122 Expires — Section 301 Replaces It draws on the 2018-2019 Section 232/Section 301 escalation sequence, when the Trump administration used sequential tariff authorities to maintain trade pressure while legal challenges to individual measures were litigated. In that episode, Section 232 steel and aluminum tariffs imposed in early 2018 remained in place while Section 301 tariffs on China were simultaneously layered. CUSMA-compliant Canadian agricultural goods were largely exempt from Section 301 (which targeted China specifically), consistent with the expectation that CUSMA exemptions would carry over to future Section 301 actions. The 2018 precedent is partially reassuring for Prairie ag producers — it suggests that agricultural tariff escalation against Canada would require a specific agricultural policy trigger, not just a change in tariff authority (Congressional Research Service retaliatory tariffs report, May 2025).

Source context: Congressional Research Service R48548, Retaliatory Tariffs on U.S. Agriculture and USDA’s Responses; CRS IF12595, U.S.-Canada Trade Relations.

CUSMA Review Fails draws on the 2019 NAFTA renegotiation period. During the 2017-2019 NAFTA/CUSMA renegotiation, U.S. section 232 tariffs on Canadian steel and aluminum were imposed (June 2018), bilateral threats escalated, and Canada maintained retaliatory tariffs, yet the USMCA/CUSMA text was ultimately signed in November 2018. The resolution came after approximately 18 months of escalation, driven largely by U.S. agricultural sector lobbying and automotive industry pressure. The same structural interests are present in 2026, but the political dynamics of the Trump second term — less constrained by prior NAFTA institutional relationships — add uncertainty to the 2026 analogue (Government of Canada CUSMA review resources; Congressional Research Service).

Source context: Government of Canada, CETA Committee meeting records; Congress.gov CRS IF12595.

China Canola Meal Tariff Suspension Expires draws on the 2019-2021 canola seed dispute resolution. China blocked Canadian canola on biosecurity grounds in March 2019, affecting Richardson International and Viterra seed export licenses. The dispute was resolved in a phased manner between mid-2019 and early 2022, with most access restored after political tensions around the Meng Wanzhou extradition eased. The 2019 dispute lasted approximately three years before full restoration. The current 2025-2026 canola meal suspension follows a similar political-resolution trajectory — access was restored through a bilateral political arrangement, not through a formal trade agreement. The key difference is that the current seed access carries a formal five-year anti-dumping duty that cannot be eliminated by political goodwill alone (Canola Council of Canada historical trade documentation; Government of Canada Global Affairs backgrounders).

Source context: Canola Council of Canada China tariff tracker; USDA FAS Canada attaché reports.

Forward Context

Five calendar events over the next 90 days have direct tariff relevance for Prairie producers. The April 30, 2026 deadline for the European Commission’s EUDR impact assessment report determines whether EU soy traceability enforcement will proceed on its current schedule — relevant to canola meal competitive positioning in European markets, but secondary to the Canada-specific tariff files. The Canadian Grain Commission’s April-May export data will reveal whether canola seed bookings to China at the 14.9% rate are materializing at volumes consistent with a meaningful trade restoration. India’s rabi harvest assessment, expected in May 2026, will determine whether the 10% lentil duty faces escalation pressure — the most immediate unresolved tariff risk on the prairie pulse file.

The July 1 CUSMA joint review opening and the July 24 Section 122 expiry are the two events that define the second-half tariff risk environment. Between now and July 1, Canadian Trade Minister LeBlanc has been conducting bilateral meetings in Washington with the U.S. Trade Representative — the outcome of those discussions will shape whether the CUSMA review opens in a constructive or adversarial posture. The Bank of Canada’s April 15 rate decision is a secondary but relevant marker: any rate cut that weakens the loonie improves Canadian export competitiveness in USD-denominated markets but also reduces the cost-adjusted impact of tariff-related input cost increases, since many agricultural inputs are priced in Canadian dollars.

The filing of state-led lawsuits against the Section 122 tariffs on March 5 and March 9, 2026 — heard by the U.S. Court of International Trade on April 10 — adds another legal variable to the tariff environment. If the courts invalidate Section 122 before July 24, the U.S. tariff architecture reverts to Section 232 as the only remaining broad trade restriction on Canadian goods. That outcome would actually benefit CUSMA-compliant Prairie agricultural exports, which already have no Section 122 exposure, by removing the political pressure associated with the surcharge. The Section 122 legal challenge is not a Prairie ag risk — it is a potential source of tariff simplification.

TAGS

India yellow pea tariff, CUSMA review 2026, China canola tariffs, Section 232 steel aluminum, Section 122 expiry, WTO dispute Canada US, canola meal China suspension, India lentil duty, CUSMA agriculture, tariff-rate quota Prairie exports

This report was developed with the assistance of artificial intelligence and is provided for informational purposes only. It does not constitute financial, investment, agronomic, or legal advice and should not be relied upon as the sole basis for farm planning, risk management, or operational decision-making. Western Farm Report assumes no liability for actions taken based on the contents of this report. Readers are encouraged to verify data with primary sources and consult qualified professional advisors before making financial or operational commitments.