Successful Farming, one of America’s largest farm publications, is reporting that the American Farm Bureau would prefer negotiation rather than tariffs as a first step to resolving disputes with trading partners. 

“I think it’s important, when we’re talking about friends like Mexico and Canada, that we talk first,” said Roger Cryan, chief economist, American Farm Bureau. “And think about shooting later.” 

President-elect Donald Trump, who started a trade war with China during his first term, has threatened to enact tariffs of 25 per cent on imports from Mexico and Canada and an additional 10 per cent on Chinese imports on his first day in office unless they reduce illegal immigration and drug smuggling. He also said the so-called BRICS group of nations would see 100 per cent tariffs if they backed a replacement for the dollar in international trade.

Mexico and Canada, the two largest U.S. export customers and the leading suppliers of food and agricultural imports, account for $4 of every $10 in cross-border trade. U.S. ag export sales shrank six per cent (6%) during Trump’s first-term, Sino-U.S. trade war.

Joe Glauber, senior research fellow of the International Food Policy Research Institute, does not agree with Trump using tariffs as a lever for action on immigration or drugs rather than traditional trade goals, such as opening markets. 

Trade wars cause collateral damage. During Trump’s first term in office, China countered with tariffs on U.S. soybeans, reducing market prices for the oilseed by $1.50 a bushel. 

“If we’re really interested in improving the agricultural trade balance,” said Cryan, Congress should revamp the H-2A guestworker program. The formula used to set wages for guestworkers, he said, was “essentially pricing us out of the market.” Horticultural products, such as fruits and vegetables, comprise nearly half of U.S. food and ag imports. 

Source: Successful Farming December 4, 2024