New trade tensions threaten to squeeze U.S. farmers as retaliatory measures loom. President concedes American consumers can expect to feel “some pain.”
President Trump’s decision to levy tariffs on America’s three biggest agriculture trading partners has farmers hoping for the best and bracing for the worst. On Saturday, Trump announced he was imposing 25% tariffs on products imported from Canada and Mexico as well as 10% tariffs on imports from China. Canadian energy products would be subject to 10% tariffs.
Trump says the tariffs are necessary to combat illegal drugs coming into the country and related criminal activity.
House Agriculture Committee Chairman Glenn “GT” Thompson, R- Pa., says Trump’s tariff policy has “been an effective tool” in leveling the global playing field and ensuring fair trade for American producers.” Still, not all Republicans were on board with the president’s plan. During a Sunday interview with 60 Minutes, former Senate Republican Leader Mitch McConnell predicted the tariffs will drive up the cost of everything.
“Why would you want to get in a fight with your allies over this?” McConnell said.
House Agriculture Committee ranking member Angie Craig, D- Minn., says nobody wins in a trade war. She notes that tariffs imposed during the first Trump administration increased costs for farmers and consumers. Craig predicts the same will happen now, pushing prices up for items like oil, lumber, avocados, tomatoes, bell peppers, lettuce, broccoli, cucumbers, onions, mushrooms and other fresh foods. She says the new round of tariffs are “especially questionable” since Trump is the president who negotiated the USMCA trade agreement with Canada and Mexico.
“At a time when farmers are struggling with high input costs and the American people continue to struggle with the cost of groceries, these tariffs will make it more expensive for farmers to grow food and for consumers to buy it,” Craig says. “Additionally, when American farmers face the inevitable retaliatory tariffs from our trading partners, their profits take a hit.”
While speaking to reporters on Sunday, Trump himself acknowledged the tariffs will cause “some pain.”
That pain could be coming quickly. On Sunday, Canada announced it would impose 25% tariffs on more than $100 billion in U. S. goods. Mexico is expected to announce its tariff response on Monday. Chinses officials also said it also intended to respond with countermeasures.
American Farm Bureau Federation officials note that more than 20% of U.S. agricultural products are exported. Last year, ag exports accounted for $174.5 billion in farmer revenue. The Farm Bureau estimates that every $1 of ag exports results in more than $2 in domestic economic activity.
AFBF President Zippy Duvall says he is alarmed about potential harm to farmers resulting from tariffs. While careful to say that Farm Bureau members support the goals of security and free trade, he says experience shows farmers and rural communities will bear the brunt of the expected economic consequences. Duvall notes that more than 80% of the U.S. supply of potash, a key fertilizer component, comes from Canada.
“Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs,” Duvall says.
The U.S. Dairy Export Council notes that retaliatory tariffs from China during the first Trump administration cost dairy farmers an estimated $2.6 billion between 2019 and 2021. USDEC President and CEO Krysta Harden called on the Trump administration to bring all parties to the table and deliver a solution that minimizes unintended consequences to farmers, rural manufacturers and consumers.
“The White House cited the ongoing flow of illicit drugs into the United States as the primary reason behind the imposition of tariffs,” Harden says. “While this legitimate concern needs to be swiftly addressed, we urge discussions between all countries involved to resolve the issues in a manner that preserves the livelihoods of dairy farmers and manufacturers in rural America.”
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