"Rising Fertilizer Costs and Declining Exports
Deal a Blow to Farmers"
As U.S. President Donald Trump had announced, concerns are rising that imposing tariffs on imported agricultural products starting from the 2nd of next month could cause food prices on American household tables to soar.
On the 5th (local time), Bloomberg News pointed out that President Trump's large-scale tariff policy would raise prices of agricultural products such as fruits and meat, stating, "Consumers, already suffering from high food prices due to years of supply chain disruptions, could be severely impacted."
According to Bloomberg News, fruits, vegetables, and other horticultural products account for more than half of the agricultural products imported into the United States. Among these, sugar, coffee, cocoa, and other tropical agricultural products, which have high consumption, make up about 15%.
In particular, Mexico is the largest supplier of sugar to the United States, accounting for about one-third of sugar imports. Bloomberg pointed out that if the U.S. begins imposing tariffs on agricultural products from next month, prices of these major agricultural products, including sugar, are bound to rise.
Additionally, due to recent severe droughts causing a reduction in pastureland, beef supply has decreased for five consecutive years, falling to the lowest level since 1951, leading to a significant increase in beef imports from Australia, Canada, Mexico, Brazil, and New Zealand. In this situation, agricultural tariffs are expected to affect the rising prices of beef, which is mainly consumed by American households.
The New York Times (NYT) reported that tariffs imposed on Mexico and Canada are likely to stimulate price increases for snacks and alcoholic beverages.
American food company Mondelez International, famous for cookie products like 'Oreo,' operates factories in Mexico producing various products. Alcohol company Diageo imported tequila from Mexico and whiskey from Canada last month, with these products accounting for 45% of the company's total U.S. sales last month.
Matt Campbell, a consultant at futures and options brokerage StoneX, said, "Tariffs will have a tangible impact on the U.S. economy in some way," adding, "Ultimately, they will hit in a way that raises prices."
Furthermore, Bloomberg News pointed out that agricultural tariffs could also negatively affect American farmers. U.S. farmers rely on imports for about 90% of potassium fertilizer, with about 85% of that sourced from Canada. Accordingly, the U.S. Fertilizer Institute and Republican Senator Chuck Grassley have requested the Trump administration to exempt fertilizer products from tariffs.
There are also forecasts that due to China's retaliatory tariffs, demand for major U.S. export agricultural products such as soybeans, corn, and wheat will decrease and prices will fall, worsening difficulties for American farmers. Illinois Governor JB Pritzker criticized, "President Trump pledged to lower prices from his first day in office, but instead, he is effectively taxing working families."
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