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Apr. 7, 2025
by Ryan Hanrahan, University of Illinois' FarmDoc project Champagne, IL -- Agri-Pulse's Oliver Ward reported late last week that "certain agriculture inputs will be exempt from the 10% across-the-board duties and higher reciprocal duties applied to specific trade partners, according to a detailed list of carveouts published by the White House." "Listed among the 37 pages of products excluded from the steep new duties are potash, certain herbicides and pesticides, peat, lumber products, lubricating oils, some energy products, and certain pharmaceuticals, including tranquilizers and vaccines for veterinary use. Diquat and paraquat are among the herbicides listed," Ward reported. "Representatives from the agriculture industry as well as farm-state lawmakers had been pushing the administration in recent weeks for a slate of exemptions to any new duties." The Farm Bureau Federation's Betty Resnick wrote this past Friday that "farmers and ranchers, like all Americans, will be paying more for many of the products they purchase, from seed for vegetable growers to tractors and other equipment made of steel. Some exemptions for products including potash and peat as mentioned above, which were hard fought for by agricultural organizations such as the American Farm Bureau Federation, are a testament to the effectiveness of farmers' and ranchers raising their collective voice." Ward reported that "ag industry representatives had been calling for exemptions to fresh produce and food products that the U.S. does not produce domestically, but none were included in the list of exempted products." "Even if the exemptions provide some price relief on critical inputs, they will do nothing to soften the blow of any retaliatory tariffs imposed by foreign governments. China responded to the new duties with a 34% tariff on all American exports on Friday," Ward reported. "The European Union has also said it is assembling countermeasures." Canada and Mexico Exempt from New Tariffs, too Reuters' Emily Green and David Ljunggren reported late last week that "Mexico and Canada avoided fresh tariffs on Wednesday with President Donald Trump exempting the United States' top trading partners from his new 10% global tariff baseline, although previous duties remain in place." "Goods from Mexico and Canada that comply with the USMCA trade agreement between the three countries will largely remain exempt from tariffs, except for auto exports and steel and aluminum which fall under separate tariff policies," Green and Ljunggren reported. "Trump previously imposed 25% tariffs on Mexico and Canada for not doing enough to curb migration and fentanyl trafficking, but later issued a carve out for USMCA compliant goods." "Speaking after Trump's announcement, Canada's Prime Minister Mark Carney said he still planned to respond with countermeasures," Green and Ljunggren reported. "'We are going to fight these tariffs with countermeasures, we are going to protect our workers, and we are going to build the strongest economy in the G7 (group of nations),' he said." Potash Exemption Most Important, Experts Say Reuters' Ed White reported in early March that "the U.S. imports 90% of the potash its farmers use, with 80% of those imports coming from nearby Canada, and it cannot replace that with domestic production." "'Full pass-through of the 25% tariff could increase prices by more than $100 per ton for (potash) supplies sourced from Canada,' said a February 4 analysis by a team from the University of Illinois and Ohio State University," White reported. "Farmers only make money on the difference between what they pay to grow a crop and what they can sell it for, so increasing costs by $100 per ton would be a major hit on farmer incomes." "While Canada is not the only potash supplier to the U.S., it is the closest. Russia and Belarus are the other major players, but they have been affected by the war in Ukraine, with sanctions and port bans hurting those countries' ability to export product," White reported. "Fertilizer is most farmers' biggest input cost. In 2024, the U.S. Department of Agriculture estimated that 22% of total corn production costs come from fertilizer, and that includes labor, machinery and overhead expenses," White reported. Tweet |
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