In an Apr. 3 update on their website, Michigan Agri-Business Association (MABA) said that they continue to receive inquiries from their members about tariffs. The update read: “In summary, President Trump announced on Apr. 2 that the US will enact a baseline 10 percent tariff on all imports, and enact various higher duties on select countries…
For Canada and Mexico, there are no major changes versus what was already enacted last month. The policies enacted last month remain in effect. In other words, goods from Mexico and Canada that comply with the USMCA are largely exempt, except for auto exports and steel and aluminum.” The USMCA is a free trade agreement between the United States, Mexico and Canada that took effect on Jul. 1, 2020.
What do the tariffs mean for the agriculture industry that is so prominent in Oceana County?
Chuck Lippstreu, President of MABA, said that while this is a fast-developing situation, the tariff issue is “causing a level of uncertainty in the agricultural sector” across the state and the country.
“The markets today are not a positive development,” he said.
“The agricultural industry relies on trade and exports to be successful,” Lippstreu said, and noted that Michigan exported nearly $3 billion worth of agricultural products last year. “That’s a success we want to continue to grow,” he said.
This trade supports not just farmers, but the supply chain built around them — grain elevators, trucking companies and the like. “Everyone benefits when we can export,” Lippstreu said.
Lippstreu said that MABA is taking a fact-based approach to the news. “The administration has been open and clear about its intentions of raising tariffs in pursuit of its policy goals,” he said. Nonetheless, Lippstreu said that a “protracted trade war would be negative for agriculture and small towns.”
He explained that for Michigan’s number one and number two agricultural trading partners, Canada and Mexico, not much will change. But the president enacted a major new tariff on China, on top of its existing tariffs, bringing the rate up to 54 percent. China is reciprocating at the same percentage.
“This causes substantial concern,” Lippstreu said. China is a major buyer of US soybeans and pork.
Lippstreu said that West Michigan agri-businesses have the same concerns as those across the state, and MABA is encouraging their members to focus on the facts amidst many unknowns. But the bottom line is, “Trade and exports help local economies, and we want to have open trade,” Lippstreu said.
