Recent controversy following President Trump’s tariffs and the resulting retaliatory tariffs brings to mind a conversation I once had with a South Texas rice farmer who told me, “If the government would let me sell my rice in Cuba, I would never ask for another penny in government payments.”
This comment highlights the reality facing modern agriculture – exports are essential to survival. As much as 20% of American farm revenue comes from exporting food to other countries. As this trade war escalates, American farmers are growing increasingly concerned about the impact it will have on their livelihood.
The group Farmers for Free Trade is now running TV ads calling on the president to end these tariffs and uphold the promise he made to American farmers during his campaign. Farmers made up a huge portion of President Trump’s base during the 2016 election. Now they are being used as pawns in his trade war. China and Mexico have already imposed tariffs targeted toward U.S. agriculture exports. This will cause a massive drop in income for growers and others involved in agriculture-related business.
This type of market uncertainty will lead to a downturn on investments in agriculture. Since food processing is not a globally-integrated industry, the tariffs will also cause a sharp increase in prices and a reduced supply for everyone. It is going to be American small towns that feel the brunt of this burden. Hopefully, the administration will either come to its senses, or Congress will have to act to reverse this self-destructive policy.