Tariffs Threaten Farmers and Food Prices
Recent history warns us that tariffs can have a huge impact on farmers and the price you pay for food. In the 2018 trade war, the U.S. imposed tariffs on a range of imported products from China. China retaliated by imposing tariffs on many U.S. agricultural products. As a result of retaliatory tariffs, U.S. farmers lost $27 billion in sales in 2018-19.
To help offset the losses to farmers, the Trump administration paid out $28 billion in a newly created subsidiary, meaning taxpayers paid higher costs for food AND added $28 billion in new spending to pay for it. A new trade pact in 2020 backpedaled on the original tariff but by then the damage had been done. China had established a new trade relationship with Brazil.
A recent study applied the lessons for this trade war to project the impact of proposed new tariffs. Research conducted by the World Agricultural Economic and Environmental Services predicts these tariffs would lead to a reduction of 51% in soy exports and 84% in corn exports. The study also points out there is not nearly enough demand in the rest of the world to make up this difference. This comes at an especially tough time for farmers - net farm income for 2024 is projected to decline $6 billion (4.1%) from 2023 and dropped $41.2 billion (22.6%) from 2022. Declining farm income and the projected losses from tariffs increases the odds of losing more family farms and farmland.
There is also an environmental cost. As nations turn to Brazil to replace American crops, Brazil destroys millions more acres of rainforest to make room for farming that had been done by American farmers.
As tariffs become a more significant part of America’s economic landscape, we need to communicate with our legislators that American food prices and farm livelihoods are not something citizens want to negotiate with.
12/11/2024
