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Trade policies continue to impact U.S. agriculture

An updated study by the Farm Foundation and Purdue University says U.S. agriculture continues to be negatively impacted by President Trump’s decision to leave the Trans-Pacific Partnership.

And although the new U.S. Mexico Canada Agreement could lead to a $454 million increase in U.S. ag exports, the report finds that withdrawal from the TPP reduces exports by $1.8 billion a year.

Purdue University ag economist Dominique van der Mensbrugghe, an author of the study, says ag exports would increase by nearly $3 billion a year if the U.S. rejoined the agreement.

“The TPP-11 gets signed and what happens to U.S. exports,” he says. “They’re going to go down because all of the sudden Canada has better market access in Japan, Australia, and Vietnam to the detriment of U.S. exports.”  

The analysis also looks at what would happen if the U.S., Mexico, and Canada fail to ratify the USMCA and the Trump administration pulls out of NAFTA.

“You go from a situation of zero tariffs almost everywhere to what are called MFN tariffs-most favored nation,” he says. “All three countries are in the world trade organization, so they have to offer at a basic level of tariffs which is a most favored nation.”

If this happened and retaliatory tariffs continued U.S. ag exports could drop by nearly $22 billion, resulting in lower incomes for farmers, reduced land returns and farm labor displacement.

Mensbrugghe completed the study with Purdue University’s Wally Tyner and Maksym Chepeliev.

The Farm Foundation presented the findings at a forum Monday.