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President Donald Trump’s plans to impose tariffs on some of the US’s largest agricultural trade partners next month threaten to upend markets and unleash food-price inflation.
Mexico, Canada and China account for about half of all American agriculture exports, and the US has become increasingly reliant on its two neighbors for fruit and vegetables. Tariffs along with any retaliatory measures will curb overseas sales and increase energy and fertilizer costs for farmers. All of that will likely mean higher prices for consumers at grocery stores.
Trump has set general levies of 25% on Canada and Mexico, though agreements were reached on Monday to delay those by a month, while a tariff of 10% is set for Chinese goods. Whether or not the tariffs end up being implemented, and exactly how the other countries might retaliate, will be key to what happens to commodity prices.
“These tariffs will only make it harder for American families to put food on the table and for American farmers and ranchers to sell their products,” said Minnesota Senator Amy Klobuchar, a Democrat and member of the Senate Agriculture Committee. “Farmers and ranchers want an even playing field, not handouts necessitated by another Trump trade war.”
We break down the markets that are vulnerable to disruption.
Fruit and Vegetables
Mexico and Canada accounted for nearly 90% of US fresh vegetable imports by value in 2023, and more than half of fresh fruit shipments, according to the US Department of Agriculture.
Mexico is now the biggest source of US farm imports, shipping tomatoes, fresh berries and other vegetables. The country is a particularly big source of avocados, supplying more than 90% of what Americans eat. Canada, meanwhile, ships apples, mushrooms and potatoes.
Corn and Pork
Mexico ranks as the biggest buyer of US corn and pork and any counter measures could hurt America’s biggest crop as well as meat companies such as Tyson Foods Inc. and Smithfield Foods Inc.
“We’ve been preparing for this,” Tyson’s Chief Executive Officer Donnie King said during a conference call on Monday. “We’ll leverage our global expertise to identify the best markets for our products.”
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