During Monday's episode of Alabama Farmers Federation's "Alabama AgCast" podcast, Mitt Walker, ALFA's director of governmental and agricultural programs, offered his take on the Trump administration's tariff policy and its impact on the farm economy.
According to Walker, 20% of crop value could be tied to export markets abroad, demonstrating a potential benefit for American farmers if the tariff policy proves successful.
"Yeah, a lot of things moving on trade, tariffs, trade deals, agreements," Walker explained. "I think it would be important to first look at where we have been in terms of trade. Historically, agricultural trade — we have always seen that as a bright spot on our nation's trade balance. Until the last few years, we always exported more agricultural products than we brought into the country. Now, as a whole, when you look at all of the goods and services that we import or export, we run a trade imbalance. So, you know, historically, when you look at that trade imbalance, we've gotten there over a number of decades, and it's not going to fix itself overnight. The alarming thing for agriculture is the last three years, I believe, we've set new record highs for a trade deficit. So obviously, what we've been doing is not exactly working like it should. So I think this administration is looking for a reset in some respects."
He continued, "When we hear tariffs and we hear things like that, I think traditionally agriculture has been a little afraid of what those countries may do in terms of retaliation. We did see that during some of President Trump's first term. But a lot of effort being made — first new trade deal was announced just a few days ago with the United Kingdom, gives us some additional access for our beef producers to get more beef into the UK, reduces tariffs on ethanol, which will benefit our corn producers. So yeah, that's kind of the first one. And I think if you look at it, it makes a lot of sense with our really strong relationship with the United Kingdom. I think that's a good one to start with. Thankfully, some of the tensions between the U.S. and China in terms of escalating tariffs back and forth on each other — the administration announced this week, those really high tariffs have been paused, at least for the next 90 days to give them time to kind of talk through what the next steps might be. Our three largest trading partners are Mexico, Canada, and China. About half of all our exports go to those three countries. So, having a deal secured with China will be important."
"I think when you look at our overall trade imbalance with China, it is huge and trying to minimize that, I think, is what we're doing in terms of not just agriculture, but all of the trade back and forth," Walker added. "So, hoping for good things there, big market for us, and I'm excited to see this administration also looking to expand into new markets. About 20% of the value of our crops can be tied to the fact that we have export markets available to us. I think as we open up new markets, and again, appreciate the attention there. Hopefully, that's one way to help to move those commodity prices a little higher by increasing demand around the world."
Walker acknowledged the "short-term" concerns but said farmers were aware of the long-term benefits, potentially for the next two decades.
"I mean, simply just trying to get investments made in our country as opposed to investments being made in other parts of the world, and then we import those products. I think the target is to bring manufacturing back, production back to this country. And, you know, it may be some short-term pain involved. I think a lot of our farmers are concerned about the short-term, but also see the big picture and understand the goal here is to put us in a better position, not just for the next one or two years, but for the next 10 to 20 years. It starts seeing more production back in our country."
Jeff Poor is the editor-in-chief of 1819 News and host of "The Jeff Poor Show," heard Monday-Friday, 9 a.m.-noon on Mobile's FM Talk 106.5. To connect or comment, email [email protected] or follow him on Twitter @jeff_poor.
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