New tariffs could hit Washington farmers hard

Any battle over tariffs between the United States and Canada, China, and Mexico is worrisome, but if it escalates, it will hit Washington farmers particularly hard. Avoiding that possibility should be a primary goal.

Tariffs could trigger new trade wars. The last retaliation in tariffs eight years ago hurt agriculture.

“A trade war with economic partners is the last thing our farmers and ranchers need,” said Congressman Dan Newhouse (R-WA4), whose family owns and operates an 850-acre farm near Sunnyside. Excessive costs, turbulent markets, inflation, and an outdated Farm Bill are already contributing to trying times on farms across the country.

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President Trump’s “shock and awe “campaign in his first months as President shook the cobwebs out of the White House. The Oval Office is now a swarming beehive of executive orders, meetings and press conferences. Lots is happening in a hurry.

Trump promised voters he would close our borders, arrest and evict illegal criminals, stop fentanyl and human trafficking, and give American farmers and businesses a better deal as they trade worldwide. That action was overdue and needed to happen quickly.

He announced his administration is seeking “reciprocal” tariffs on imports from Canada and Mexico is 25% and China’s is 10% spurred action. It was a wake-up call.

Under the plan, the government would slap imports with fees intended to match the tariffs and value-added taxes (which are like sales taxes) that U.S. trading partners impose on American exports to their countries, USA Today reported.

“Whatever another country charges, we’re charging them,” Trump says. While the tariffs on Canada and Mexico are on pause until March 4, the threat of retaliatory fares looms large for much of our agriculture industry. “We need to ensure Canada and Mexico continue to work with the United States to stop the flow of fentanyl into the country so that these tariffs remain paused indefinitely – or dropped altogether,” Trump announced.

Newhouse remembers the impact that retaliatory tariffs had on farmers and ranchers in 2018. “The United States placed tariffs on a variety of imports, but tariffs on steel and aluminum specifically drove our trading partners like Canada, Mexico, China, India, and the European Union to retaliate.”

American agriculture withstood the worst of the impacts of the retaliatory tariffs, which ranged from two percent to 140 percent. The total agricultural export losses associated with retaliatory tariffs surpassed $27 billion.

In Washington, apples and cherries are most vulnerable to retaliatory tariffs. In 2017, U.S. apple exports to Mexico and China were subject to additional retaliatory tariffs of 20% and 40%, respectively, raising the total tariff rates to 20% and 50%, respectively. The two countries accounted for about 30% of the $969 million of total U.S. apple exports.

In 2016, China bought 33,000 tons of premium cherries worth $140 million before it imposed a retaliatory tariff of 40% on U.S. cherries, raising the total tariff rate to 50%.

Trump wants to level the playing field for American farmers and businesses. Thankfully, the White House is taking a closer look at tariff impacts.

In our state, 931,100 jobs were supported by trade, representing 20.0% of all jobs statewide. Washington exported $61.2 billion in goods to foreign markets in 2023.

“While I believe it is critical to stop the flow of fentanyl into the United States, I understand the reality that retaliatory actions by Canada, Mexico, and China could inflict further harm on our agriculture industry,” Newhouse concluded.

Hopefully, the President’s pause in implementing reciprocal tariffs will continue to result in actions in Canada and Mexico to halt the flow of illicit drugs and send China a message to stop the flow of fentanyl ingredients to the drug cartels.

Don C. Brunell is a business analyst, writer, and columnist. He is a former president of the Association of Washington Business, the state’s oldest and largest business organization, and lives in Vancouver. Contact thebrunells@msn.com.