Ag will be hit as U.S. moves ahead with steel, aluminum tariffs

Retaliation expected from Canada, Mexico and EU targeted at ag products as steel and aluminum tariffs go into effect.

Jacqui Fatka, Policy editor

May 31, 2018

4 Min Read
Ag will be hit as U.S. moves ahead with steel, aluminum tariffs

Commerce Secretary Wilbur Ross announced that the U.S. will place tariffs of 25% on steel and 10% on aluminum imported from Mexico, Canada and the European Union, effective June 1. Those countries immediately announced that they would respond with retaliatory tariffs against U.S. products.

Canada represents 15% of total U.S. agricultural exports, Mexico 13% and the EU 8%. U.S. pork shipped $1.5 billion of product to Mexico, its largest export market, and $792 million to Canada, its fourth-largest market, last year.   

In March, following the announcement from the Trump Administration that it was seeking to place tariffs on steel and aluminum tariffs, the EU released a 10-page list of proposed tariffs, many of which target U.S. agricultural goods, including sweet corn, rice, cranberries, orange juice and whiskey.

Canada's Prime Minister Justin Trudeau tweeted, “American tariffs on Canadian aluminum & steel are unacceptable. As we have said, we will always stand up for our workers, and today we’re announcing retaliatory measures to this attack on our industry.”

Trudeau said he plans to impose dollar-for-dollar tariffs for every dollar levied against Canadians by the U.S.

Mexico announced retaliatory tariffs of its own on Thursday, targeting imports from the U.S. that include pork products, prepared meat products, apples, grapes, cranberries and cheeses. 

Related:Steel tariffs could spell 31,500 ag-related job losses

Mexico intends to impose tariffs on some U.S. pork cuts and pork products. Full details – such as the tariff rate and the exact products to which the tariffs could apply – are not entirely clear at this time. In 2017, Mexico was the largest volume market for U.S. pork exports at more than 800,000 metric tons, valued at $1.51 billion.

U.S. Meat Export Federation (USMEF) president and chief executive officer Dan Halstrom said it would be very unfortunate if pork no longer was able to enjoy duty-free access to the critical Mexican market. 

"If these tariffs are implemented, they will negatively impact millions of consumers and thousands of people in the meat and livestock industries on both sides of the border," Halstrom said. "USMEF is hopeful that this impasse will be resolved as soon as possible, with duty-free access for U.S. pork maintained. This is especially important now that key competitors such as the European Union are making market access gains in Mexico and view it as a promising market for their pork products."

U.S. Grains Council (USGC) president and chief executive officer Tom Sleight said, “Based on information we have heard from our customers and past experience, we have every reason to believe U.S. agriculture, including the products we represent, will be among the first hit by counter-measures from our trading partners.”

Sleight said USGC had strong hopes that the situation would be averted permanently, but it now appears that they’ll need to prepare for retaliation and its direct impact on farmers.

“Our global staff is doing this to the best of their abilities as we continue to follow new developments," he added.

Brian Kuehl, executive director of Farmers for Free Trade, said this announcement opens the floodgates to billions in new tariffs on American agriculture.

“These tariffs will harm U.S. farmers and take many American farm operations to the breaking point. Already, farmers are grappling with the impact of previous tariffs, which have caused falling commodity futures, higher equipment prices and the markets they’ve fought to get into for decades to vanish overnight. The addition of new retaliatory tariffs on everything from bourbon to rice to orange juice and cranberries will only widen the pain to additional farmers across the country,” Kuehl said.

Sen. Heidi Heitkamp (D., N.D.) criticized the move. Heitkamp co-sponsored bipartisan legislation introduced by Sen. Jeff Flake (R., Ariz.) to nullify the aluminum and steel tariffs announced by the Administration on March 8.

“Instead of building closer ties with trading partners like Canada, Mexico and the EU in an effort to confront bad actors like China, these tariffs severely limit our ability to build the international support needed to keep China in check and protect American jobs and our rural economies,” she said.

Senate Finance Committee chairman Orrin Hatch (R., Utah) also said the tariff on aluminum imports is the wrong move. “Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers. We should build on our success in overhauling the nation's tax code with complementary trade policies that, rather than favoring one narrow industry, make all sectors of the U.S. economy more competitive. In light of the mounting evidence that these tariffs will harm Americans, I will continue to push the Administration to change course,” Hatch said.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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