How Trump's Tariffs Are Impacting U.S. Farmers

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Speaker 3 Eastern Time on Thursday, March 20th.

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Speaker 3 Hey there, it's the NPR Politics Podcast. I'm Tamara Keith.
I cover the White House.

Speaker 4 And I'm Asma Khalid. I also cover the White House.

Speaker 3 And NPR's Kirk Siegler is with us from Boise. Hey, Kirk.

Speaker 5 Hello, guys.

Speaker 3 You're with us because the impact of the Trump administration's tariffs is already being felt in certain parts of the country, especially with commodity farmers. Kirk, you were just in North Dakota.

Speaker 3 It's a state that's deeply Republican. What are you hearing from farmers there about challenges that they're running into now?

Speaker 5 More than 67%

Speaker 5 of North Dakota's electorate went for President Trump. And farmers are anxious, I think, if you could sum it up in one word.
For some context, just a step back for a second.

Speaker 5 You mentioned commodity crops. Well, commodity crop prices are already low and

Speaker 5 inflation is up or still, you know, relatively high, meaning prices are high for everything, for inputs, i.e., that means in the farm world, fertilizer and other things that are needed to grow crops in the fields.

Speaker 5 And farmers are coming into this spring planting season with a lot of uncertainties. And then on top of that is a looming trade war.

Speaker 3 So basically what they can sell it for is down but what it costs to grow is up.

Speaker 5 Exactly. And the entire U.S.
agriculture system or a lot of it is really geared toward exports. And in particular I was visiting in North Dakota with soybean growers.

Speaker 5 More than half in a lot of counties of North Dakota of all the soybeans grown are shipped by by rail to the Pacific Northwest and then sent overseas to China.

Speaker 5 And that market is now totally up in the air.

Speaker 3 Wow. So Asma, you follow the tariffs a little bit more closely than I do.

Speaker 3 And I will say I am confused because it is so on again, off again with the tariff announcements that I don't really know where things stand.

Speaker 3 So are there currently new tariffs in place and what do they affect you?

Speaker 4 Yes, there are. And I will say that I don't think anyone would be surprised to say that you're sort of confused.
I actually have a Google Doc where I keep all the tariffs straight for myself.

Speaker 4 And so what we've seen uh is that President Trump at this moment in time has put in place it was first 10% additional tariffs on China. Then he doubled that.
So it's a plus 20% tariff on China.

Speaker 4 But it's not really just a 20% tariff on China because he actually put tariffs on China in his first term that Joe Biden kept in place.

Speaker 4 So you're talking about, you know, some manufacturers have told me they're looking at, let's say, a cumulatively, you know, in some cases, maybe a 45% total tariff from China. So that's one category.

Speaker 4 Then President Trump put in place 25% tariffs on all steel and aluminum imports. Doesn't matter the country of origin across the board.
Those are the sort of two big buckets of tariffs.

Speaker 4 currently in place. But of course, he has been foreshadowing that April 2nd is going to be a big day.

Speaker 4 He's referred to it as Liberation Day for the United States, where he he intends to announce reciprocal tariffs.

Speaker 4 His view being that if a country charges a certain percentage to the U.S., the U.S. will put on place an equal reciprocal fair amount back because he thinks that the U.S.

Speaker 4 has been getting ripped off by other countries.

Speaker 3 And as I understand that, it extends beyond just tariffs, but to

Speaker 3 other non-tariff trade barriers.

Speaker 3 It's a little bit of a mystery of what's going on.

Speaker 4 It's murky as to what it will actually look like, right? And what percentage the U.S. intends to put in place for other countries.

Speaker 4 And also, you know, to what degree, maybe on April 2nd, they're going to announce something. And maybe it's like opening the door to trade negotiations with certain countries, right?

Speaker 4 It's unclear to me what the eventual end goal is here.

Speaker 3 And Kirk, how does that play with people who are trying to make decisions?

Speaker 5 Well, people are very worried about April 2nd. But then on the other hand, like Osmo was saying, like, some things are exempted.

Speaker 5 We hear about something being exempted from an import from Canada, for instance, a very narrow thing, then it's on again, off again. And farmers I spoke with and spent time with,

Speaker 5 just kind of shadowing them on the job, hauling grain in this case,

Speaker 5 you know, are trying to figure out, well, what does this actually mean and what is coming on April 2nd? And how do we run a business, they told me, with so much changing?

Speaker 5 This April 2nd announcement came on Truth Social.

Speaker 5 I spent the day with a soybean grower named Justin Sherlock.

Speaker 5 And when he read that and, you know, heard that the president say that American farmers should be ready to feed America come April 2nd and to have fun, here's how he reacted.

Speaker 6 This notion of have fun and kind of

Speaker 6 that really struck a lot of farmers. It was the wrong note.
I think a lot of them, it has a lot of them questioning, is there a plan?

Speaker 5 You know, coming into this administration, I think there was hope amongst many farmers in the Midwest and farm country that, you know, President Trump was going to negotiate.

Speaker 5 This was all a negotiating tactic. But like what we're saying, this sort of on again, off again, maybe this happens on April 2nd, maybe it doesn't.
We don't know if it's a negotiation.

Speaker 5 I mean, these are folks that need to figure out exactly what they're going to plant in the spring planting season. And

Speaker 5 as far as I could tell, they don't really know at this point because they don't know what's going to happen. And there's so much uncertainty.

Speaker 3 Trevor Burrus, Jr.: And, Kirk, does America have the capacity to buy more of what American farmers are producing? Or at this point, is American agriculture meant to be exported?

Speaker 5 Well, so much has been set up. That's a really interesting question.
Like, so much has been set up over the past couple of decades

Speaker 5 under free trade. American farmers got really good at growing a lot of crops, and they'll tell you they're proud.
They say they're feeding the world.

Speaker 5 And so, a lot of the system is set up for export. So, you know, in North Dakota, as an example, I sat with Justin Sherlock, who you just heard.
We're sitting at a pickup. It's idling.

Speaker 5 I just remember this moment where we're sitting there watching a Canadian Pacific train go by in North Dakota, probably hauling fertilizer.

Speaker 5 We're standing in front of a grain elevator where soybean is stored and it's sitting next to a rail line where it's to be shipped to the Pacific Northwest, where then it will be shipped overseas to China, the main buyer for North Dakota soybeans.

Speaker 5 And like, it's really hard to undo this system and scale down, in this case, is what would have to happen, and undo these trade agreements and delicate relationships, I'm told, that have been put in place over decades, to just undo it overnight.

Speaker 5 It's something that would take probably months, years, really, to do.

Speaker 5 And that's why there's so much concern that people right now are already on the brink and they just don't know what's going to happen.

Speaker 3 All right, we're going to take a quick break and we'll have more in a moment.

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Speaker 3 and we're back and askma i want to ask you how does the white house explain this like what is their rationale for these tariffs and and the impacts that it's having on the agriculture industry?

Speaker 4 Aaron Powell, Jr.: I mean, I do want to be clear here that economists have been warning that tariffs could lead to higher prices for Americans.

Speaker 4 I mean, frankly, we even heard the chairman of the Federal Reserve just yesterday allude to the fact that tariffs could be causing some increase in inflation expectations.

Speaker 4 But broadly, what you have heard from the Trump administration is that There is an acknowledgement that there will be some sort of short-term pain, but they insist that that Americans will ultimately see long-term gains.

Speaker 4 And this is in part, I will say, you know, because the president himself believes that the United States has been getting ripped off.

Speaker 4 He feels like this needs to be a fundamental shift and that this tariff policy will be a way of raising revenue for the United States. In fact, this is how he described April 2nd just this week.

Speaker 8 April 2nd is Liberation Day for our country because we're going to finally be taking in money. We're already doing it, a lot of money.

Speaker 8 As you know, we put down some early tariffs on people and countries that were not treating us well.

Speaker 4 And so basically, their argument is, even if it possibly leads to a recession, bear with us. It'll take a bit of time, but ultimately, there will be, in their view, long-term gains.

Speaker 4 His vision is to increase American manufacturing and make more things in the United States.

Speaker 5 Farmers in the Midwest, in particular, endured a lot of tough times. The last time the U.S.

Speaker 5 was involved in a trade war in 2018, and the Trump administration back then pumped in upwards above $20 billion in aid to states like North Dakota, where soybean growers were hit hard because grains were left in the bin because China wasn't buying their product.

Speaker 5 I think there's even more uncertainty now about what we see what's going on in the cutting of federal agencies. The U.S.

Speaker 5 Agriculture Secretary, Brooke Rollins, has tried to assure farmers that there will be aid, but I think there is, it's an open question about how much that aid might be if this really goes forward on April 2nd, and if there will be people in the USDA and Farm Services Agency, because we're seeing a lot of cuts to these agencies and job eliminations across the board and the federal government, whether there will be people to administer that aid.

Speaker 5 So I think that's also adding to the uncertainty that I certainly detected in Farm Country.

Speaker 3 The U.S. has trade deals with Canada and Mexico.
So what's the point of having escalating tariffs on countries that the U.S. has already signed deals with?

Speaker 4 Yes, I mean, the United States has a big trade deal known as USMCA that was not crafted under a Democratic administration. I mean, you know this.

Speaker 4 It was signed by President Trump during his first term in office. And when he signed that brand new agreement into place, he lauded it, said it was very special.
It was the best trade deal.

Speaker 4 And now here he is, you know, undermining his own trade deal. And you hear sort of different explanations for why.

Speaker 4 A White House official told NPR that ultimately the circumstances have changed since when USMCA was first signed.

Speaker 4 They point to the fact that China has been trying to bypass tariffs and using Mexico as a middleman to try to get more Chinese steel into the country.

Speaker 4 And look, that is an argument, Tam, that I have heard from Democrats as well. It is a plausible, understandable argument.

Speaker 4 Now, the question is, well, why not try to improve a trade deal, work within the existing trade deal? Why rip it up entirely?

Speaker 4 And some experts I've spoken with see Trump's actions as a negotiation tactic because they point out that this US-MCA deal is up for review next year.

Speaker 5 And like the farmers I spoke to who were very nervous in North Dakota about all this

Speaker 5 facing an uncertain future, they hadn't even felt like they had been made hold by with the aid from the 2018 trade war and now they've got all these other compounding factors.

Speaker 5 I mean, you know, they told me that they were open to possibly getting a better deal with China, but they were really scratching their heads about Canada. Like, I heard, why is the U.S.

Speaker 5 picking a fight with Canada? Because that's where most of the fertilizer comes from, from potash mines in central Canada. It's just where the resource is, and the U.S.

Speaker 5 cannot produce enough to support its agricultural industry. So, you know, it's like everything in modern agriculture and just across the board

Speaker 5 is

Speaker 5 interwoven and dependent on other countries and trade.

Speaker 3 Kirk, not to employ a cliché here, but here I go. Farmers are not a monolith.
There are commodity farmers like you're talking to. There are specialty crop farmers.
There are cattle ranchers.

Speaker 3 Do they all agree?

Speaker 5 Yeah, it's not a monolith, cliché or not. And actually, you know, a lot of farmers are, you know, diverse.
They don't just have one or two crops. They might have a little cattle operation on the side.

Speaker 5 There are dairies involved here too. And so I would caution that, and myself included, that we're lumping everybody in.
All farmers are worried because some are actually probably going to fare okay.

Speaker 5 It's sort of like the timber industry in the Northwest might actually see a boon if there are steep imports put on Canadian lumber coming in. It's complex.

Speaker 5 And in North Dakota in particular, since the 2018 trade war, there have been efforts to create more local markets for soybean growers in particular. I visited a couple of new crushing plants.

Speaker 5 plants where the American farmers can bring their soybeans to the U.S. to a processing plant there, and they're not as dependent on exports.

Speaker 5 The asterisks behind that is that most of the product made at those plants is exported.

Speaker 3 So I do want to ask both of you if you have any sense of what the long-term impact might be on the U.S. agriculture industry from these tariff policies.

Speaker 5 I mean, another cliche we'll have to wait and see in the coming months, right?

Speaker 5 I mean, if in fact April 2nd comes to pass and there are these tariffs put in place and they stick and they stay and there's a trade war or whatever we call it, you're talking about the potential of overhauling a huge part of the American economy and farmers would have to scale down and many would probably go out of business.

Speaker 5 So I think there will be huge impacts and I don't know that it's something that we can even compare to 2018 at this point because everything seems to be changing as the farmers told me and as we know I'm not an economist but economists and business people say I keep hearing over and over that business does not like uncertainty, and that's exactly what we have right now in farm country.

Speaker 4 And I would say beyond just the agriculture sector, I was speaking to someone from the Canadian Chamber of Commerce the other day, and he said to me that he has never seen Canadians feel as frustrated and angry as they are right now in his entire lifetime.

Speaker 4 He said that they view what is going on as an existential threat, an absolute betrayal. And so whatever damage, he said, is done at the economic economic level, that is going to be significant.

Speaker 4 But, in his view, even if that's repaired, it's going to take a long time to rebuild the trust at a personal level.

Speaker 3 Okay, well, Kirk, thank you so much for joining us.

Speaker 5 Glad to be here.

Speaker 3 And I'm Tamara Keith, I cover the White House.

Speaker 4 And I'm Asma Khalid. I also cover the White House.

Speaker 3 Thank you for listening to the NPR Politics Podcast.

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