Proposed Tariffs Threaten U.S. Farmers and Consumers, Industry Groups Warn
Source: DairyNews.today
U.S. agriculture and consumer markets could face significant disruptions if proposed tariffs on key trading partners are implemented, according to industry groups. The measures, floated by President-elect Donald Trump, include tariffs of up to 100% on imports from countries such as Mexico, Canada, and China, as well as members of the BRICS bloc.
Trump’s proposed tariffs aim to address issues ranging from illegal immigration and drug trafficking to currency manipulation, but agriculture experts warn the fallout could be severe. Farmers, food manufacturers, and consumers are expected to bear the brunt of higher costs and retaliatory measures.
Agricultural Exports at Risk
The U.S.’s top three agricultural export destinations—Mexico, Canada, and China—accounted for nearly $85 billion in U.S. agricultural goods in 2023, according to the USDA. Mexico alone imported $28.6 billion in U.S. agricultural products, making it the largest buyer of American corn and corn-based sweeteners. Canada followed closely with $14.5 billion in imports, including poultry, dairy, and soy products, while China imported $29.1 billion, led by soybeans and poultry.
Sam Kieffer, vice president of public policy at the American Farm Bureau Federation, expressed concern that new tariffs could provoke retaliatory actions. “When tariffs are levied by the United States, foreign governments often target American agricultural exports, jeopardizing a vital revenue stream for our farmers,” Kieffer said.
Import Costs Likely to Rise
In 2023, the U.S. imported $85.6 billion worth of agricultural products from Mexico, Canada, and China, including fresh produce, beef, dairy, and sugar. Retaliatory tariffs could increase costs across the food supply chain, with higher input prices for manufacturers and elevated grocery bills for consumers.
Additionally, the United States relies heavily on Canadian potash—87% of U.S. imports of this key fertilizer component come from Canada. Policies that disrupt this supply could significantly impact farmers already grappling with volatile fertilizer costs.
Economic Precedents and Fallout
Trump’s tariff proposals mirror trade policies from his first term, which led to a trade war with significant economic repercussions. In 2018, retaliatory tariffs imposed by Mexico and Canada targeted U.S. pork, fruits, and vegetables, among other products. This led to strained agricultural markets and spurred the renegotiation of the North American Free Trade Agreement (NAFTA), resulting in the USMCA in 2020.
Trump’s latest tariff proposals could violate USMCA terms, prompting Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum to seek clarity on Trump’s intentions.
The China Factor
China, the third-largest importer of U.S. agricultural goods, could be the most critical battleground in any tariff escalation. U.S. farmers exported over 42 million tonnes of goods to China in 2023, with soybeans accounting for 63% of those shipments. Retaliatory tariffs could mirror China’s response to 2018 tariffs, which cost U.S. agriculture over $27 billion, according to the USDA.
Impact on Households
Consumers are also likely to feel the strain. A recent report from the Peterson Institute for International Economics estimates that proposed tariffs could cost the average American household $2,600 annually. An additional 100% tariff on BRICS countries, which Trump mentioned after the report’s publication, could exacerbate these costs.
Industry Cautions Against Economic Risks
“The agricultural economy is already under pressure from rising input costs and declining commodity prices,” said Kieffer. “Further disruptions could send shockwaves through rural communities and the broader economy.”
Farmers, industry leaders, and economists agree: while tariffs may serve as a negotiating tool, their implementation would carry significant risks for U.S. agriculture, consumers, and trade relations.
Agricultural Exports at Risk
The U.S.’s top three agricultural export destinations—Mexico, Canada, and China—accounted for nearly $85 billion in U.S. agricultural goods in 2023, according to the USDA. Mexico alone imported $28.6 billion in U.S. agricultural products, making it the largest buyer of American corn and corn-based sweeteners. Canada followed closely with $14.5 billion in imports, including poultry, dairy, and soy products, while China imported $29.1 billion, led by soybeans and poultry.
Sam Kieffer, vice president of public policy at the American Farm Bureau Federation, expressed concern that new tariffs could provoke retaliatory actions. “When tariffs are levied by the United States, foreign governments often target American agricultural exports, jeopardizing a vital revenue stream for our farmers,” Kieffer said.
Import Costs Likely to Rise
In 2023, the U.S. imported $85.6 billion worth of agricultural products from Mexico, Canada, and China, including fresh produce, beef, dairy, and sugar. Retaliatory tariffs could increase costs across the food supply chain, with higher input prices for manufacturers and elevated grocery bills for consumers.
Additionally, the United States relies heavily on Canadian potash—87% of U.S. imports of this key fertilizer component come from Canada. Policies that disrupt this supply could significantly impact farmers already grappling with volatile fertilizer costs.
Economic Precedents and Fallout
Trump’s tariff proposals mirror trade policies from his first term, which led to a trade war with significant economic repercussions. In 2018, retaliatory tariffs imposed by Mexico and Canada targeted U.S. pork, fruits, and vegetables, among other products. This led to strained agricultural markets and spurred the renegotiation of the North American Free Trade Agreement (NAFTA), resulting in the USMCA in 2020.
Trump’s latest tariff proposals could violate USMCA terms, prompting Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum to seek clarity on Trump’s intentions.
The China Factor
China, the third-largest importer of U.S. agricultural goods, could be the most critical battleground in any tariff escalation. U.S. farmers exported over 42 million tonnes of goods to China in 2023, with soybeans accounting for 63% of those shipments. Retaliatory tariffs could mirror China’s response to 2018 tariffs, which cost U.S. agriculture over $27 billion, according to the USDA.
Impact on Households
Consumers are also likely to feel the strain. A recent report from the Peterson Institute for International Economics estimates that proposed tariffs could cost the average American household $2,600 annually. An additional 100% tariff on BRICS countries, which Trump mentioned after the report’s publication, could exacerbate these costs.
Industry Cautions Against Economic Risks
“The agricultural economy is already under pressure from rising input costs and declining commodity prices,” said Kieffer. “Further disruptions could send shockwaves through rural communities and the broader economy.”
Farmers, industry leaders, and economists agree: while tariffs may serve as a negotiating tool, their implementation would carry significant risks for U.S. agriculture, consumers, and trade relations.
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