Sweeping tariffs went into effect across multiple economic sectors this month. Meanwhile, expanded import tariffs on products with steel and aluminum are in effect today — all directed by the Trump administration. Prices are expected to rise on these products in turn, and economists are now projecting impacts to several industries, including those here in Arkansas.
Jason Grant, professor of agriculture at Virginia Tech, says there are three key impacts when it comes to potential retaliatory tariffs by other countries on agriculture, the state’s largest industry.
“Number one, retaliatory tariffs make our products less competitive. This is because they raise the cost to foreign importers. Foreign buyers of corn or U.S. soybeans now face a higher cost to procure a U.S. bulk shipment. Number two, if foreign countries are large, then retaliation discounts U.S. export prices. And then finally, number three, when U.S. prices become discounted, that can trickle down to fewer dollars received per unit sold for producers.”
A study by the USDA estimates there was a $27 billion loss following the 2018–19 tariffs, with soybeans accounting for nearly 71 percent of that trade loss. However, this year, Grant says retaliatory tariffs have not yet been as stark.
“There hasn’t been a lot of retaliation, thankfully. It seems to be that countries are willing to sit down and think about what is needed and the wants of the U.S. administration versus what are some of the things that they can do to help enhance that trade relationship.”
Grant said that so far, it seems that preserving the stability of the trade relationship has been a priority for many countries over market retaliation.
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