Tariffs

Corn is unloaded from a truck. Ag interests are lauding an end to tariffs that have cost farmers trade with Canada and Mexico.

One dark cloud hovering over U.S. agriculture was lifted with May 17’s announcement that the U.S. will remove tariffs on imports of steel and aluminum from Mexico and Canada.

In turn, those countries will lift retaliatory tariffs on U.S. goods, including agricultural products.

U.S. agricultural groups were quick to weigh in on the welcome news, both for the relief it will bring to producers affected by the tariffs and its potential effect on ratification of the U.S.-Mexico-Canada Agreement.

But they also stressed the need for resolution of trade issues in other parts of the world.

“Retaliatory tariffs are a drag on American farmers and ranchers at a time when they are suffering more economic difficulty than many can remember,” Zippy Duvall, American Farm Bureau Federation president, said.

Elimination of the tariffs should help pave the way for approval of USMCA by Congress, he said.

“With this milestone reached, we urge negotiators to continue their work toward reopening markets with the European Union, China and Japan,” he said.

U.S. Wheat Associates and National Association of Wheat Growers said in a joint statement lifting the tariffs is an important step toward approval of USMCA.

“Leaders in Congress made it clear that the USMCA agreement would never be approved unless the tariffs on Mexican and Canadian steel were removed,” Ben Scholz, NAWG president, said.

“We want to remind members of Congress that the farmers in their states and districts expect support for this agreement,” he said.

Wheat growers thanked the administration for recognizing the tariffs are hindering trade agendas that open overseas markets. They also encouraged the repeal of all remaining steel and aluminum tariffs and noted opposition to new tariffs on autos.

“New tariffs would encourage our trading partners to retaliate against U.S. farmers and agricultural exports and further weaken international trade rules,” Chris Kolstad, USW chairman, said.

Lifting U.S. tariffs that have soured U.S.-Mexico cheese trade and slowed passage of USMCA is good news for the U.S. dairy industry, U.S. Dairy Export Council and National Milk Producers Federation said in a joint statement.

“If Mexico lifts its tariffs on U.S. dairy in response, it would be a welcome return to normalcy with our number one export market,” Tom Vilsack, USDEC president and CEO, said.

“It would also build vital momentum for swiftly advancing USMCA toward passage,” he said.

The dairy groups also stressed the importance of finding common ground with China, where retaliatory tariffs have led to a 40% decrease in U.S. dairy exports.

“To move forward in boosting exports, Congress needs to pass the USMCA and administration officials need to resolve the latest impasse in U.S. negotiations with China in a way that’s favorable to producers,” Jim Mulhern, NMPF president and CEO, said.

Trade negotiations with Japan and other key partners must also move ahead, he said.

National Pork Producers Council said Mexico and Canada accounted for more than 40% of U.S. pork exports in 2018, and Mexico’s retaliatory tariffs have cost producers $1.5 billion on an annualized basis.

“We thank the administration for ending a trade dispute that has placed enormous financial strain on American pork producers,” David Herring, NPPC president, said.

Pork producers are also hopeful the end of the dispute allows for more focus on the quick completion of a trade deal with Japan — its largest export value market — where the U.S. is losing market share to competitors with new trade deals with Japan, he said.

National Cattlemen’s Beef Association said lifting the tariffs opens the door to ratification of USMCA and encouraged Congress to act quickly.

“We cannot afford to delay action on this monumental agreement,” Colin Woodall, NCBA senior vice president of government affairs, said.

The North American Meat Institute said the tariffs have complicated its efforts to make a supportive case for USMCA.

“The removal of these barriers will help clear the way to positive and productive conversations in Congress to pass this important trade deal,” NAMI stated.

Farmers for Free Trade said $40 billion in U.S. agricultural exports hinge in the balance with USMCA and Congress should not delay consideration of the trade deal.

“What’s clear beyond Washington, D.C., is that farmers need stability now more than ever. USMCA delivers the guarantee that relationships and markets our farmers have built over decades will still be there for decades to come,” FFT stated.

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