On the 11th of this month, the USDA announced that it was suspending imports of live cattle, horses and bison through the southern U.S. border, because New World screwworm flies have been found in Oaxaca and Veracruz, Mexico. This area is about 700 miles south of the U.S. border. This dangerous and deadly pest had cost cost livestock producers and horse owners millions of dollars in losses in the southwestern U.S. until it was eradicated in the 1960’s by using radiation to make male screwworm flies sterile then releasing them to mate with female flies. This suspension is affecting importation of Mexican feeder cattle that were being imported to be fed in southwest U.S. feedlots.
Tariffs have been in the news recently, and as I’ve talked to farmers, I’ve heard their opinions and sometimes, misconceptions about what tariffs will do. Some think that too much of what they have to buy, such as machinery repairs, crop chemicals and fertilizer, and even household goods are imported, and they hope that tariffs will encourage production of these products in the U.S., which isn't always practical due to the costs of labor and materials. Other folks don’t understand that consumers pay the tariffs on the imported products they purchase, rather than tariffs reducing the cost of the products they buy.
Farm organizations are also weighing in on tariffs. American Farm Bureau President Zippy Duvall points out that Tariffs will drive up the cost of critical supplies, and retaliatory tariffs will make American-grown products more expensive globally. The combination not only threatens the competitiveness of farmers and ranchers in the short-term, but they may cause long-term damage, leading to losses of market share. National Farmers Union President Rob Larew is concerned that farmers and ranchers will bear the brunt of a global trade war again, and that without fair trade policies, the U.S. will lose more family farms. The National Cattlemen's beef Association applauds Trump’s attempts to drop trade barriers that prevent American beef from entering markets abroad as is the case in Australia, Vietnam, Thailand and the European Union. All of which brings out the fact that there is no one answer concerning whether tariffs are good or bad.
A couple of days ago, the United States and China agreed, at least temporarily, to dial back the high tariffs that were imposed by Donald Trump in April. The U.S. is lowering its 145% tariffs on Chinese imports to 30%, and in return, China will lower its tariff rate on U.S. goods from 125% to 10% for 90 days. That 30% tariff is the same rate as it was for China during Trump’s trade war during his first term in office. Observers are hopeful that this de-escalation will shorten the current trade war that’s threatening demand for U.S. agricultural products. News of a possible deal between the U.S. and China helped push soybean prices to an 11-weeek high in overnight trading between May 11th and 12th . In 2016, China imported 40% of its soybeans from the U.S. and 46% from Brazil. But by 2024, Brazil’s share of China’s soybean market had shot up to 71%, with U.S. products setting at 21% . Another troubling factor about Trump’s trade war is that fewer ships are coming into the U.S. ports, which means that fewer ships are going out, that could be carrying U.S. agricultural products. Overall, China imported $29.25 billion worth of U.S. agricultural products in 2024. That’s a 14% decline from the previous year, extending the 20% drop that occurred in 2023. U.S. agricultural exports to China have declined steadily since 2018, during the First Trump trade war, after Beijing slapped tariffs of up to 25% on soybeans, beef, pork, wheat, corn, and sorghum, in retaliation for duties on Chinese goods that were imposed by Trump during his first term.
Will Rogers wrote, “The tariff is an instrument invented for the benefit of those who ‘make’, to be used against those who buy. “
