Copy of AFF Sentinel V22 #05-Tariffs or Not
- Steve Dittmer
- Jul 22
- 3 min read
The Picture Becomes A Little Clearer
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 01/21/25
Most of agriculture celebrated the beginning of a new era with Donald Trump’s inauguration Monday. While most of everything was good news, the main worrying concern was trade and tariffs.
Monday and Tuesday provided some information. Trump did not impose tariffs on anyone on Day 1, as he’s mentioned more than once. The rest is still in flux.
His executive order gave Mexico and Canada negotiating time until Feb. 1 to get a deal worked out.
But John Carney of Breitbart shared information that Trump’s people have reached out to Mexico’s President Claudia Sheinbaum -- to “radio silence” from that end. With the money at stake from both sides, playing chicken with Trump is not necessarily a wise thing to do. Everyone agrees that the pain would be greater on Mexico’s economy but agriculture would definitely be hurt on both sides, as perishable products are more of problem than auto parts.
We’ve not heard anything more from Canada since Trudeau’s trip the day after Trump first mentioned slapping 25 percent tariffs on Mexico and Canada. China was not mentioned in the last two days but their vice-president was at the inauguration. Tariffs on everyone else in under study but not scheduled yet. Trump has asked his staff to study the situations on several points and report to him in April.
They are to examine trade balances and possible currency manipulation. They are looking at why China has not lived up to its commitments under the deal Trump’s Administration negotiated last time. But we did see China’s vice president indicating that they did not want to create trade imbalances.
News to us.
The USMCA is also under scrutiny and Trump has now indicated he wants to move the 2026 discussions on renewal forward to the summer of 2025. The countries have the option in 2026 to extend the deal for another 16 years. But Trump evidently wants to get things discussed and hammered out now.
If Mexico and Canada think they can just stall and Trump will forget about them, they have miscalculated.
Carney said Mexico and Canada appear to think Trump is bluffing. And Trump is not asking for anything radical. He is asking for them to return to the border policies as they were during his first term. Mexico had 25,000 troops deployed along their side of the border to keep illegals from crossing.
Dan Clifton of Strategas told Larry Kudlow on Fox Business channel that he views Trump’s posture as keeping his foot on their throats to make sure something gets done now. The document Trump signed Monday was an excellent document, he said. Trump has put together an excellent team and they obviously do not want to add to inflation nor trigger a recession. They are trying to twist the Rubik’s cube to get the right combination, Clifton said.
He also pointed out that the rest of the world is watching. If Mexico and Canada get away without responding, they will figure they can do the same.
They need to figure that Trump is well aware of that and as the first ones up to the plate, they will not likely be cut much slack. Trump is reportedly especially concerned about any caravans in Mexico.
Trump has consistently hammered on the theme that other countries have been taking advantage of the U.S.’ defense umbrella, our low tariffs on incoming goods, our carrying NATO and the UN and he’s not going to continue those policies.
Multitasking Monday night, he was also signing executive orders and directives while talking to reporters in the Oval office. One of those withdrew us from the World Health Organization, an obvious response to their mismanagement of the pandemic, directives on false information and favoritism towards China.
Since China rapidly became America’s third largest export destination for U.S. beef, the discussions with China will be very important. Trump has indicated that he wants to meet with China’s President Xi.
The trade memorandum did include reference to agriculture. The memo said the Administration wants policies that “promote investment and productivity,” “defends our national security” and “benefits American workers, manufacturers, farmers, ranchers, entrepreneurs and businesses.”
The memo also mentioned investigating unfair trade practices, existing trade agreements and “countries with which the U.S. can negotiate bilateral or sector-specific agreements to obtain export market access.”
That last would help USMEF, as they are constantly looking for access in new countries to develop new markets.
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