ASA monitors evolving tariffs and impact on U.S. farms

By Blair Shipp, American Soybean Association

A trade war is escalating between the United States and several of its top trade partners — including China, Canada, Mexico and even the European Union—causing uncertainty with tariff implementation, temporary suspensions and negotiations all taking place during the past week.

The American Soybean Association (ASA) is monitoring this rapidly evolving situation and its impact on U.S. soy
growers. Here is a breakdown of the latest developments,
as of Thursday, March 13.

• President Trump’s across-the-board tariffs on imported steel and aluminum went into effect on March 12 at a 25 percent rate.
• These duties, levied under Section 232 of the Trade Expansion Act of 1962, are in addition previous tariffs levied against China, Canada and Mexico under the International Emergency Economic Powers Act (IEEPA).
• To date, China has retaliated with a 10 percent tariff against U.S. soybeans.
• The European Union has released a list of U.S. export products the bloc could hit with retaliatory tariffs. Whole soybeans are on that list. However, those tariffs – should they move forward – would not go into effect until mid-April after consultation amongst EU member states and stakeholders.
• U.S. soybean exports (whole beans, soybean meal and soybean oil) are also on the target list for potential retaliation under Canada’s second retaliatory strike.
• According to the Tax Foundation, the combined tariffs imposed by the United States affect more than $1 trillion worth of imports.
• It is expected the next round of tariffs imposed will be reciprocal tariffs in early April.
  
  ASA and the U.S. Soybean Export Council (USSEC) submitted joint comments on March 11 regarding non-reciprocal trade agreements to the Office of the U.S. Trade Representative. The comments focus on tariff and non-tariff barriers U.S. soybean exports face in global marketplaces. They also highlight markets that the Trump administration should target for potential new agreements.

March tariff recap

In the early morning hours of March 4, President Trump’s 25 percent tariffs on goods from Mexico and Canada took effect. Canada responded swiftly with plans to impose 25 percent tariffs on nearly $100 billion of U.S. imports over two tranches, and Mexico’s president said it would also soon retaliate.

The United States added a 10 percent tariff on Chinese imports overnight, compounding the 10 percent export tax imposed on China a month ago and existing duties on the country’s goods. China’s comeback was quick: 10 percent retaliatory tariffs on U.S. soybeans and additional actions that limit market access.

ASA responded with a press release reiterating that its members do not support the use of tariffs, which threaten important markets and raise input costs for farmers, as a negotiation tactic. The statement underscored that the interconnected nature of agricultural supply chains means tariffs have immediate negative, and in many cases lasting, impacts on their farms and the country’s rural economy.

“Farmers are frustrated. Tariffs are not something to take lightly and ‘have fun’ with,” said ASA President Caleb Ragland, a farmer from Kentucky. “Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently.”

On March 6, the administration announced it would temporarily suspend tariffs on Canada and Mexico. ASA followed this announcement with a statement of appreciation for the tariff reprieve but continued urging the administration to seek non-tariff solutions to continue market access.

MAHA update

In early March, more than 300 organizations sent a letter to health, agriculture and environmental leaders in
D.C. calling for sound science and data to be used by the Make America Healthy Again Commission in upcoming
evaluations for products essential to food and agriculture.

The letter was sent to U.S. Health and Human Services Secretary Robert F. Kennedy, Jr., USDA Secretary Brooke
Rollins and U.S. Environmental Protection Agency Administrator Lee Zeldin.

It specifically underscores the importance of pesticides, biotechnology, and food and feed ingredients for farmers
and consumers, highlighting the ways in which these products are already robustly regulated to ensure their safe use. It also discusses the importance of retaining quality data standards to prevent misleading or outlier studies from reducing access to much-needed products.

Why it’s important: Pesticides are called out by the signatories as being essential to protect crops and ensure U.S. consumers can continue to access a safe, abundant and affordable food supply. Biotechnology is important for improving crop yields and sustainability while also improving nutritional outcomes for consumers. Food and feed products are subject to a robust regulatory framework to certify any ingredients permitted for food use are safe for consumers.

The bottom line: If access to any of these products is undermined, it could result in higher food costs for consumers or a greater reliance on foreign imports that may be less safe.

ASA, along with the American Farm Bureau Federation, Corn Refiners Association and National Oilseed Processors Association, sent a joint news release March 10, highlighting these concerns while expressing openness to working with the Make America Healthy Again Commission on the shared goal of improving health outcomes for all Americans.

“We have long been supporters of quality, science based regulation to ensure that the products we provide consumers are safe, healthy and nutritious,” Ragland said. “We’re pleased to discuss the long track record of safety
around the products we use and the food we grow on our farms. However, it is essential we continue to use credible science and evidence in regulating these products so we can continue to provide safe, affordable food to the American people and consumers around the world.”