A report from the American Farm Bureau Federation (AFBF) out this month details some of the possible consequences for American farmers. The report notes the pause on many tariffs but that this pause does not apply to goods imported from China.
Former Georgia Farm Bureau president and now the president of AFBF Zippy Duvall pointed out the tariffs could hit a concerning share of U.S. farm income. “Farm Bureau appreciates President Trump’s decision to pause the reciprocal tariffs on dozens of America’s trading partners for 90 days,” said Duvall. “We have been engaging directly with the White House, U.S. Trade Representative and U.S. Department of Agriculture to emphasize the toll tariffs will take on America’s farmers and ranchers, who are already strapped because of high supply costs and shrinking paychecks. Creating more market challenges puts at risk more than 20% of U.S. farm income. We’re encouraged that those concerns are being heard.”
For farmers, there have been a number of carveouts, such as potash and peat, but other items like seed for vegetable growers or tractors and other equipment are not included in the exemptions. The AFBF notes the report from the Tax Foundation that says the recent tariffs will result in an average tax increase (or cost increase depending on how you like your definitions of “Tax”) of $1,900 for every household. That amount would be the largest increase in 43 years.
For farmers, the retaliatory tariffs from trading partners might be the biggest concern. More than 20 percent of U.S. agricultural products are exported – such as a whopping number of peanuts to China. Peanut exports account for approximately 22 percent of total U.S. production, and that amount is nearly 15 percent of the global peanut export market share. Georgia is the number one peanut state in the country so tariffs on the goober could mean big losses. For farmers that were already operating on thin margins, the new costs could be catastrophic.
The uncertainty around the tariffs and their exact levels are also complicating the situation. “Longer-term, farmers may also see demand reduction as our economy struggles to cope with these major changes,” said the report. “The volatility of the tariff policy decisions, with new tariffs frequently being announced, paused and placed will take a toll on the American agricultural industry, as on the rest of the economy. Farmers and ranchers suffer from instability, as their soundest business decisions can be turned upside down.”
“While the pause brings some temporary certainty, questions remain about the long-term competitiveness for farmers in the global marketplace,” added Duvall. “We encourage the administration to swiftly resolve trade disputes and to pursue strategies that will ensure America’s farmers can continue to stock the pantries of families here at home, and abroad.”
