A cross-section of U.S. agricultural industries appealed to the Office of the U.S. Trade Representative this week to ensure their interests are reflected in any forthcoming reciprocal tariffs. The industries flagged non-reciprocal tariff rates and trade barriers and weighed in on the design of new duties and what the U.S. should do with the revenue.
President Donald Trump has directed administration officials to look into applying reciprocal tariffs on U.S. trade partners that subject U.S. exports to higher duties and trade barriers than their exporters face when selling to the U.S. market. As part of that effort, USTR gathered public comments this week.
Respondents from across U.S. agriculture industries highlighted a raft of foreign tariffs that far exceed U.S. rates, particularly in developing economies, which are permitted to maintain higher tariffs under international trade rules.
A submission from the California Citrus Quality Council, which represents around 3,000 citrus growers and packing houses, pointed to what it called “excessively high” tariff rates in Thailand and high duties in Vietnam, Indonesia and China, as well as in advanced economies like Japan, Taiwan and the European Union. The National Pecan Federation took aim at disproportionate tariffs India maintains, and U.S. Wheat Associates highlighted lopsided tariff arrangements with Argentina, the United Kingdom and the European Union, for example.
Among advanced economies, however, securing tariff reductions for U.S. ag exports to Japan emerged as a recurring priority for producers across multiple industries. Although the U.S.-Japan trade deal signed during Trump’s first term eliminated or reduced tariffs on certain U.S. pork, beef, vegetable and fruit products, but many sectors still face prohibitively high duties, according to the comments.
Japan maintains an average tariff on ag products above 12%, compared to the U.S.’ 4%.
Non-tariff barriers, which the president has said will be captured in any reciprocal tariff rates, also featured prominently among the submissions.
The U.S. Meat Export Federation outlined what it sees as costly and onerous requirements on meat exporters that disadvantage the U.S. in international markets.
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“For Brazil and Argentina, U.S. beef exports are limited due to complicated and costly facility and product registration processes and labeling requirements,” in addition to 10% import duties, USMEF President and CEO Dan Halstrom wrote.
Similarly in Europe, Halstrom said, the U.S. receives a quota for duty-free imports but is still subject to restrictive non-tariff barriers like an export verification program for non-hormone treated cattle.
“Thus, the U.S. utilizes less than half of its TRQ,” Halstrom argued. The EU’s forthcoming deforestation regulations will only add to the administrative burden, he added.
The EU was the object of multiple complaints around non-tariff export barriers. The National Milk Producers Federation also lamented what is described as Europe’s abuse of geographical indicators that have limited U.S. producers’ ability to break into the European market.
Multiple respondents also called for USTR to ensure countries are applying sanitary and phytosanitary measures in a transparent and science-based manner. The American Seed Trade Association, for example, complained that some trading partners require additional declaration requirements that are not disclosed on their official government websites, suggesting they may not have been devised through a transparent process and in a scientifically justifiable way.
Careful design
It’s not just favorable tariff rates that U.S ag producers want to help shape. Some of the respondents also offered comments on how to design future tariffs to avoid replicating loopholes that may benefit foreign producers and ensure their benefits reach U.S. ag.
The California Association of Winegrape Growers argued that a duty drawback program has disadvantaged domestic wine producers in the U.S. market. Importers of bulk wines – unbranded wines intended for rebranding or repackaging – are able to claim a tariff refund when they export a blended product. The program, designed to spur U.S. wine exports, is creating an uneven playing field, CAWG says.
“If additional tariffs are imposed on bulk wine imports, they must be carefully structured to prevent refunds through the duty drawback system,” the group argued in their submission.
Another respondent argued that farmers should see some benefits from the revenue generated from reciprocal tariffs. Agri Beef, an Idaho-based beef vender, argued that the Agriculture Department should stand up an “America First Cattle and Beef” program with some of the reciprocal tariff proceeds, which could provide financial incentives to U.S. ranchers to grow their herds and assistance to small meatpackers to spur competition and reduce concentration.
The president has repeatedly said that his new tariffs, including the reciprocal tariffs, will apply to everyone without exemption. But that didn’t stop some groups from making the case to exclude certain imports from duties. In its own submission, the American Italian Food Coalition requested a carveout for food products from any new reciprocal tariffs.
“Disrupting these well-established supply chains would not only harm businesses, but also likely raise prices and restrict American consumers’ access to Italian foods we know and love,” the group wrote.
The American Farm Bureau Federation went even further, urging the administration to carefully consider whether to impose any new duties on major partners like Mexico, Canada and China, arguing retaliation could hurt U.S. farmers. Canada has already levied tariffs against some U.S. ag exports in retaliation to new tariffs.
“[A]ny effort to impose additional tariffs on these nations’ imports runs the risk of significant retaliatory measures against U.S. agricultural exports,” wrote Samuel Kieffer, AFBF’s vice president for public policy.
Brazil’s ethanol defense
Brazil’s ethanol tariff of 18%, which dwarfs the U.S.’ 2.5%, has been a persistent target for lawmakers and the president. A White House fact sheet on reciprocal tariffs singled out the tariff as emblematic of the trade issues that the administration is trying to address. A submission to USTR from Growth Energy called the tariff the “the epitome of unfairness.”
But the Brazilian government used its own submission to USTR to defend the duty. Brazil stressed that its ethanol tariff is within the levels agreed to at the World Trade Organization and argued that the rate “reflects economic, social and environmental characteristics related to the production of ethanol from sugarcane.”
The submission also argued that Brazil is no different from the U.S. in some respects, which, Brazil says, uses tariffs to protect its domestic sugar industry.
“[T]he United States maintains a tariff of US $340 per ton (equivalent to a rate of approximately 80%), which penalizes Brazilian exports of the product to the United States,” Brazil’s comment reads. “For the record, Brazil does not apply any tariff equivalent to an 80% duty.”
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