10 hours Ago By Laura Rance
It’s cold comfort for Canadian farmers, but it looks likely some of U.S. President Donald Trump’s biggest fans — American farmers — will suffer as much or more as his policy agenda unfolds.
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Read unlimited articles for free today: Already have an account? Opinion It’s cold comfort for Canadian farmers, but it looks likely some of U.S. President Donald Trump’s biggest fans — American farmers — will suffer as much or more as his policy agenda unfolds.
Reports are already surfacing of U.S. farmers on the hook for tens of thousands of dollars they invested based on promises of compensation under climate change programs that have now been cancelled during Trump’s first month in office.
The cuts to USAID (United States Agency for International Development), which was the world’s largest single humanitarian hunger relief program, means hungry people will die. It has also reduced commodity purchases from U.S.
farmers by US$2.1 billion. But export trade is where American farmers will feel the biggest hit.
Economists predict farm gate prices will fall and market share will be lost. “The re-election of Donald Trump as U.S.
president promises a return to the chaotic and unwise trade policies of his first term — policies that damaged the aggregate U.S. economy, with export-oriented agriculture bearing a disproportionate share of the costs,” Russell Hillberry, an agricultural economist with Purdue University in Indiana, writes in an essay titled: “Interesting times for U.
S. trade policy.” Analysts on both sides of the Canada-U.
S. border have struggled to reconcile the stated objectives with the probable outcomes of Trump’s actions. They don’t align.
How do you find the rationale behind crazy? When Hillberry, a veteran international trade analyst, juxtaposed the available evidence against Trump’s actions during his first term as president (2017-21), the researcher came up with an explanation so incredible, it seems credible. He’s convinced Trump’s tariff threats are no bluff. They’re coming.
Import tariffs are one way to raise revenues to support his promised tax cuts. But if those dollars go to support tax cuts, they won’t be available to compensate farmers for collateral damage, as happened during Trump’s first term, Hillberry says. Plus, as the constitution bars Trump from seeking a third term, he won’t be as interested in looking after farmers.
There’s another more devious reason for the president to impose high tariffs. They are another means of securing the executive’s hold on government. “In many countries, high tariffs facilitate corruption by government officials, who use their authority over tariff collection to exchange tariff reductions/exemptions for bribes that are paid by importing firms,” Hillberry says.
In the past, tariff exemptions in the U.S. needed congressional approval.
That changed during Trump’s first term, when the exemption process was brought under the exclusive authority of the Executive Branch. “Statistical analysis of the tariff exemption decisions made under then-president Trump shows that, all else equal, firms donating to Republicans in the 2016 election cycle were more likely to be granted exemptions from paying tariffs and firms donating to Democrats were more likely to have tariff exemption requests denied when compared to a firm that made no donations at all,” Hillberry writes. “In this author’s view, the motive to use the tariff exclusion process for political and/or corrupt purposes is a key reason to believe that large tariffs will, in fact, be put in place during the next administration.
” Hillberry said Mexico, Canada and China are tariff targets simply because they are the country’s largest trading partners. “Imposing tariffs on the largest trade flows gives him the most opportunity to use the tariff exclusion process for his personal and political benefit.” Wednesdays A weekly dispatch from the head of the Free Press newsroom.
The Purdue researcher expects U.S. landowners’ incomes will fall by six per cent under Trump.
Economic models suggest consumers could see additional household costs of US$7,000 per year. Food manufacturers, however, will benefit because lower agricultural commodity prices give them access to cheaper inputs. And, in another perverse economic outcome of a politically motivated tariff war, China emerges as the net winner.
“China’s export interests are hurt by reduced access to the U.S. market, but the retaliatory tariffs that other countries put on U.
S. exports give Chinese exporters a new advantage over U.S.
exporters in those markets,” Hillberry writes. “This advantage in foreign markets is more than enough to offset the losses to China of its own bilateral trade war with the U.S.
” Don’t expect all this to make sense. Just remember: if you keep peeling back the layers of an onion, eventually you’ll want to cry. Laura Rance is executive editor, production content lead for Glacier FarmMedia.
She can be reached at [email protected] Laura Rance is editorial director at Farm Business Communications. Our newsroom depends on a growing audience of readers to power our journalism.
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Laura Rance is editorial director at Farm Business Communications. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider .
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