Smith: U.S. farmers and ranchers are among the first casualties in a growing trade war, American Farm Bureau trade specialist Dave Salmonsen says, Canada is focusing its retaliation mostly on metals, but isn’t leaving ag products untouched.
Salmonsen: Pizza, yogurt, chocolate, orange juice, beer and whiskey. For ag products, that’s what we’re seeing 25 percent retaliatory tariffs start up from Canada. The European Union is also retaliating for the same reason, and, for ag products, they’ve included rice and cranberries, peanut butter, kidney beans, also whiskey, and that’s also going to be 25 percent tariffs. Mexico has done things in two levels. In June, they put 10 percent tariffs including pork, cheese, apples and whiskey. Here in the beginning of July, they’re going to up that to 20 percent.
Smith: Salmonsen says many effects will take time to surface.
Salmonsen: In the near term, for contracts, potentially they have to be executed already, it’s up to the importer to pay the tariff and see how much of it they can pass on in higher prices to their consumers. In a little longer term, you would think that if we’re not price competitive in those markets, the buyers will try to find product elsewhere, if they can. Those export markets will dry up.
Smith: If the tariff dispute drags on, Salmonsen says, everyone from producers to processors will feel the effects. Even so, he adds, tariffs are a tool to get people to change policies. Farm Bureau wants countries involved to sit down and talk to get those policies changed and the tariffs ended as quickly as possible. What should farmers do in the meantime?
Salmonsen: Watch this closely. Make sure that other people, we always say your congressmen and senators, when you have the chance, know what the current effects are if you’re being affected, or what potential effects are going to be down the road on you.
Smith: Chad Smith, Washington.