Mar 13

American Soybean Association Provides Detailed Tariff Update

A trade war is escalating between the U.S. and several of its top trade partners—including China, Canada, Mexico, and even the European Union—causing uncertainty with tariff implementation, temporary suspensions, and negotiations all taking place over the past week. ASA is monitoring this rapidly evolving situation and its impact on U.S. soy growers. Here is a breakdown of the latest developments:

  • President Trump’s across-the-board tariffs on imported steel and aluminum went into effect yesterday at a 25% rate.
  • These duties, levied under Section 232 of the Trade Expansion Act of 1962, are in addition previous tariffs levied against China, Canada, and Mexico under the International Emergency Economic Powers Act (IEEPA).
  • To date, China has retaliated with a 10% tariff against U.S. soy.
  • The European Union has released a list of U.S. export products the bloc could hit with retaliatory tariffs. Whole soybeans are on that list. However, those tariffs – should they move forward – would not go into effect until mid-April after consultation amongst EU member states and stakeholders.
  • U.S. soybean exports (whole beans, soybean meal, and soybean oil) are also on the target list for potential retaliation under Canada’s second retaliatory strike.
  • According to the Tax Foundation, the combined tariffs imposed by the United States affect more than $1 trillion worth of imports.
  • It is expected the next round of tariffs imposed will be reciprocal tariffs in early April.

ASA and USSEC submitted joint comments on non-reciprocal trade agreements to the Office of the U.S. Trade Representative. The comments focus on tariff and non-tariff barriers U.S. soybean exports face in global marketplaces. They also highlight markets that the Trump administration should target for potential new agreements.

Recap: Last week, President Trump’s 25% tariffs on goods from Mexico and Canada took effect just after midnight in the early morning hours of March 4. Canada responded swiftly with plans to impose 25% tariffs on nearly $100 billion of U.S. imports over two tranches, and Mexico’s president said it would also soon retaliate. The U.S. added an additional 10% tariff on Chinese imports overnight, compounding the 10% export tax imposed on China a month ago and existing duties on the country’s goods. China’s comeback was quick: 10% retaliatory tariffs on U.S. soybeans and additional actions that limit market access.

ASA responded with a press release reiterating that its members do not support the use of tariffs, which threaten important markets and raise input costs for farmers, as a negotiation tactic. The statement underscored that the interconnected nature of agricultural supply chains means tariffs have immediate negative, and in many cases lasting, impacts on their farms and the country’s rural economy.

“Farmers are frustrated. Tariffs are not something to take lightly and ‘have fun’ with. Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently,” said Caleb Ragland, ASA president and soy farmer from Magnolia, Kentucky.

On March 6, the administration announced it would temporarily suspend tariffs on Canada and Mexico. ASA followed this announcement with a statement of appreciation for the tariff reprieve but continued urging the administration to seek non-tariff solutions to continue market access.

“Cross-border trade between our three nations is vital for the continued success of U.S. agriculture, and we appreciate the president’s work to protect our sector,” Ragland said in the statement. “We were particularly heartened to see a drop in duties for imports of Canadian potash, on which our farmers rely.”

ASA on Tariffs in the News:

ASA leaders and staff have been inundated with media requests from national and international media, in addition to agriculture media, regarding tariffs and the impact on U.S. soybean farmers. Here is a list of just some of that widespread coverage:

Other Tariff News:

Verified by MonsterInsights