A FREE ESTIMATE TODAY? RIGHT NOW, THE ECONOMIC IMPACT OF PRESIDENT DONALD TRUMP’S TARIFFS WITH KEY TRADE PARTNERS LIKE CHINA. CHINA RETALIATING THIS MONTH WITH AN ADDITIONAL 15% TAX ON AMERICAN FARM PRODUCTS, INCLUDING CHICKEN, PORK, SOYBEANS AND BEEF. DAIRY FARMERS HERE IN WISCONSIN COULD POTENTIALLY PAY THE PRICE FOR IT AS WELL. JOINING US NOW TO HELP US MAKE SENSE OF IT ALL, CHUCK NICHOLSON, HE’S AN ASSOCIATE PROFESSOR OF ANIMAL AND DAIRY SCIENCES AND AGRICULTURAL AND APPLIED ECONOMICS AT UW MADISON. HIS RESEARCH WAS RECENTLY FEATURED IN TIME MAGAZINE. SO I FEEL LIKE HE’S THE PERFECT PERSON TO TALK TO TO HELP US GET A BETTER UNDERSTANDING OF THIS. CHUCK, BEFORE WE GET INTO THE SPECIFICS, I’M JUST CURIOUS FROM YOUR POINT OF VIEW, HAVE YOU SEEN THIS SORT OF WHIPLASH OF TARIFFS IN LIKE, THE PAST COUPLE OF WEEKS? IT’S ON, IT’S OFF. HAVE YOU SEEN THIS BEFORE? IN PREVIOUS ADMINISTRATIONS? THIS IS A LITTLE BIT OF UNPRECEDENTED TERRITORY. I THINK THAT DURING THE FIRST TRUMP ADMINISTRATION, WE HAD A BIT OF THIS, BUT IT WAS MORE PREDICTABLE, I THINK, AND MORE LONG LASTING. WHERE WE ARE NOW IS KIND OF A TERRITORY THAT IN THE COURSE OF MY CAREER, LOOKING AT TRADE RELATED ISSUES, WE HAVEN’T REALLY SEEN. SO WHEN YOU HAVE THIS SORT OF WHIPLASH WITH TARIFFS, FIRST THEY’RE ON THE TABLE, THEY’RE OFF THE TABLE. THEY’RE 15%. THEY’RE 25%. HOW DOES THAT IMPACT THE ECONOMY WHEN IT’S NOT STABLE? WELL, ONE OF THE THINGS THAT MOST BUSINESSES REALLY DON’T LIKE IS UNCERTAINTY. AND IT’S ALMOST ALWAYS EASIER TO DEAL WITH A KNOWN SITUATION, TO FIGURE OUT HOW TO BEST APPROACH IT THAN TO BE IN A SITUATION WHERE YOU’RE NOT QUITE SURE WHAT YOUR STEPS SHOULD BE, BECAUSE YOU’RE NOT QUITE SURE WHAT THE ENVIRONMENT IN WHICH YOU’RE GOING TO BE OPERATING WILL BE. AND THAT APPLIES EQUALLY TO DAIRY FARMS, DAIRY PROCESSING BUSINESSES, FOOD RETAILERS. AND IT’S REALLY SORT OF A NATIONWIDE ISSUE THAT WE SHOULD BE THINKING ABOUT. SO HOW SIGNIFICANT OF A TRADE PARTNER IS A COUNTRY LIKE CHINA FOR DAIRY FARMERS, AND WHAT IS THE POSSIBLE IMPACT FOR WISCONSIN’S DAIRY FARMERS? SURE. SO I LIKE TO POINT OUT TO PEOPLE THAT OUR TOP THREE DAIRY TRADING PARTNERS, AND THIS IS NATIONAL LEVEL DATA, ARE MEXICO, CANADA AND CHINA, IN THAT ORDER. SO DAIRY TRADE IS REALLY PRETTY IMPORTANT FOR THE US DAIRY INDUSTRY. IT’S BEEN THE MAIN SOURCE OF GROWTH IN MILK PRODUCTION AND PRODUCT SALES OVER THE LAST 10 TO 15 YEARS. AND SO THERE ARE POTENTIALLY SOME PRETTY MAJOR IMPACTS OF HAVING A STRAINED TRADE RELATIONS WITH THOSE MAJOR TRADING PARTNERS. ABOUT 40% OF OUR DAIRY PRODUCT EXPORTS BY VALUE WENT TO THOSE THREE COUNTRIES IN 2024. SO THIS IS A PRETTY IMPORTANT PART OF THE DAIRY ECONOMY IN THE US AND IN WISCONSIN. YEAH, NO DOUBT ABOUT IT. REAL QUICK, I WANT TO PLAY SOMETHING FOR YOU AND GET YOUR REACTION TO IT. THIS IS FROM THE U.S. AG SECRETARY LATE LAST WEEK TALKING ABOUT FARMER SUPPORT FOR THE PRESIDENT. LET’S LISTEN AND THEN WE’LL GET YOUR REACTION ON THE BACK END. SURE. THE FARMERS UNDERSTOOD WHEN THEY SUPPORTED PRESIDENT TRUMP. HE’S ALWAYS TALKED ABOUT TARIFFS, WHETHER IT WAS 2015, 2016, 2019, 2020 AND AGAIN 2023 AND 2024. THEY SUPPORTED HIM IN 8,090% NUMBERS. SO SO THEY THEY UNDERSTAND HIS VISION BUT ALSO UNDERSTAND THERE MAY BE SOME SHORT TERM CHALLENGES WITH THAT. CERTAINLY IN THIS CURRENT FARM ECONOMY. SO CERTAINLY A LOT TO BREAK DOWN THERE. FIRST AND FOREMOST. ONE, WERE THEY EXPECTING THIS SORT OF IMPACT? AND TWO, WILL THIS BE SHORT TERM OR COULD THIS VERY WELL LIKELY BE A LONGER LINGERING PROBLEM FOR FARMERS? WELL, I THINK IT’S A LITTLE BIT DIFFICULT TO SAY WHAT WAS ON THE MINDS OF FARMERS TO THE EXTENT THAT THEY SUPPORTED TARIFFS. I THINK IT’S ALWAYS EASIER TO SUPPORT SOME TARIFF THAT IS ON SOMEBODY ELSE OTHER THAN YOU, AND YOU MIGHT BELIEVE THAT THAT WOULD BE THE CASE. AND YOU KNOW THAT THAT MAKES IT A LITTLE BIT EASIER TO BE SUPPORTIVE OF THAT SORT OF SITUATION. WHAT WE’RE LOOKING AT NOW IS, AGAIN, THIS PERIOD OF UNCERTAINTY WHERE WE’RE NOT REALLY SURE HOW LONG OR HOW HIGH THESE TARIFFS WILL BE. AND AS I MENTIONED, THAT UNCERTAINTY ALONE IS SORT OF ENOUGH TO BE DISCONCERTING TO BUSINESS OWNERS TRYING TO MAKE DECISIONS. THE IMPACTS, IF WE SORT OF SETTLE THESE DISAGREEMENTS THAT WE HAVE WITH OUR MAJOR DAIRY TRADING PARTNERS, MAY NOT BE ACTUALLY THAT SUBSTANTIAL. WHERE WE WOULD SEE MUCH MORE SUBSTANTIAL IMPACTS IS IF WE CARRY ON WITH THE CURRENT POLICIES FOR A LONGER PERIOD OF TIME OVER THE COURSE OF A YEAR OR TWO. THEN WE START TO SEE THOSE IMPACTS ADD UP. QUITE SUBSTANTIALLY. YEAH, CERTAINLY. SO PROFESSOR CHUCK NICHOLSON, THANKS SO MUCH FOR BEING HERE WITH US TODAY TO HELP US MAKE SENSE OF WHAT’S HAPPENING AROUND US. STILL, IN THE FIRST 100 DAYS OF THIS ADMINISTRATION, AND CERTAINLY A LOT THAT