Tariffs
Tariffs, also known as taxes on imported goods, are a tool used by President Donald Trump as part of his overall economic vision. As U.S. agriculture navigates tariffs and their implications on trade, commodity prices, input costs and more, ag economists and farmers remain divided on the effectiveness of tariffs and what the changes mean for the broader economy and livelihoods.
The majority of respondents in the March Ag Economists’ Monthly Monitor agree the U.S. is currently in a trade war, but who wins? Ag economists say it’s not the U.S., Canada or Mexico but rather Brazil that could come out on top.
Tariff whiplash is consuming the commodity markets — and the possible impact is stirring up quite the debate. At present, President Trump says he’s sticking to his plan to impose additional tariffs on Canada, Mexico and China starting April 2.
While many farmers are comparing the current threats of tariffs and trade wars to the situation they endured in 2018, Joe Vaclavik believes this time will be better.
Additionally and specifically, Canadian potash imports into the U.S. will be subject to a reduced import tariff of 10%.
Mexico’s president said on Tuesday the country will respond to U.S. tariffs with a 25% tariff on U.S. goods, but she will hold off announcing the targeted products until Sunday.
In 2023, the U.S. imported nitrogen, phosphorus, and potassium fertilizer products valued at more than $10 billion, and of that more than half came from Canada.
Trump said Monday that his planned 25% tariffs on all Mexican and Canadian exports to the U.S. “are going ahead on time, on schedule,” meaning the duties would take effect on March 4 at the conclusion of a one-month suspension.
What we need for the long-term are sensible and predictable policies that allow farmers and other business leaders who rely on international commerce to make plans for growth and prosperity in the 21st century.
The only thing harder than keeping up with the velocity of news from Washington D.C. is figuring out what it means for the future. On the latest episode of Unscripted, long-time ag economist Dan Basse provides insights into what we can expect.
“It’s unlikely that changes in tariffs will impact prices headed into the Super Bowl, however, we’ll see how it plays out in the coming weeks,” Dr. Michael Swanson says.