Copy of AFF Sentinel V22 #25-Liberation Day
- Steve Dittmer
- Jul 22
- 5 min read
Canada, Mexico Dodge Bullets
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 04/03/25
Liberation Day was supposed to supply certainty to the world about President Trump’s tariff plans.
But there is another side of the equation: how other countries will respond to Trump’s challenge. Because after all, he is challenging the status quo trading system. And they will have to see whether they can accept new rules or negotiate something different with the Trump Administration or lower their tariffs, non-tariff trade barriers, cease currency manipulation or subsidies on goods and services. Remember, sellers don’t have the luxury of flexibility when it comes to the U.S. as a market. Buyers have more flexibility, to change products, not buy at all or buy what they have been buying.
The best news for the beef industry is that it appears that beef and pork from Canada or Mexico, since they are covered in the USMCA already, will not be tariffed. Goods and services that are covered in that agreement are not affected and only things outside of that agreement will be subject to the 25 percent tariff. It is regarded as separate from the tariffs announced Tuesday.
President Trump announced that there will be a flat ten percent tariff on goods imported into the U.S., except for a list of egregious offenders that will have their own specially assigned tariffs. Only a business-oriented salesman would explain the tariff list for those special countries as “discounted” to roughly half what the USTR’s calculations of tariffs they’ve charged us, plus charges for non-tariff trade barriers, currency and subsidies.
Trump said the tariff figures on his schedule were “kind” reciprocity. Thus China, will not be charged the full 67 percent by his team’s calculation but only 34 percent. The EU’s discounted rate would be 20 percent, Taiwan’s discounted rate is 32 percent, Japan 24 percent and South Korea 35 percent. The list of countries with special rates was 48 countries long.
Interestingly, two countries that have shipped us a lot of lean beef over the years Australia and New Zealand have rates of ten percent. NCBA noted that Australia has sold us roughly $29 billion worth of beef over the years but taken not one dollar’s worth from us, due to non-scientific barriers.
The EU has many non-tariff and non-scientific barriers on our beef and then added climate change requirements.
There will also have to be enforcement mechanisms to eliminate cheating, like countries transshipping goods to another country with a more favorable tariff rate and then shipping to the U.S.
NCBA’s Ethan Lane was in the Rose Garden for the announcement and emphasized that the Trump Administration will work to clamp down on the various trade barriers countries have used to limit access for American beef. NCBA and USMEF will have no trouble providing them with a list.
Of course, reciprocal trade means negotiations with other countries could lower tariffs or could involve getting rid of non-tariff or non-scientific trade barriers. Now that the figures are known, no doubt some countries will be lining up appointments with Administration officials for discussions.
Some countries will elect to swallow the figures and exporters and importers will have to negotiate prices and terms. Several experts projected, based on experience in the past, that importers will likely absorb at least half of the increased tariffs at first. The CEO of a well-known fruit importer, Driscoll, said prices will likely not increase much in the near term but next season under new contract negotiations, the growers in other countries might charge more.
He agrees with Trump’s ultimate goal of evening the playing field on many products but tariffs are a negotiating tool that hopefully, won’t be needed for too long.
Of course, Trump’s goal is to get companies to move manufacturing to America so as avoid any tariff, as well as enjoy a better business climate of lower taxes, fewer onerous regulations, more and lower energy prices, more available capital and back door access to one of the largest, richest markets in the world.
There was much emphasis on bringing back American factories and providing jobs for American workers. Trump said he did not blame other countries for taking advantage of America for years. Our leaders had allowed it to happen. Other countries were taking care of their people. Now we have to take care of ours, he said.
Our tariff policies today actually trace back to the post- WWII era. The Fabulous Fifties in America were possible because the rest of the world’s powers were in rubble.
When we were a kid, Japan was turning out cheap toys as some way of building up a decimated manufacturing industry. Japan equaled cheap, low quality. From that base, that post-WWII situation, has grown the reputation for high quality Japan enjoys today.
The U.S. not only conceived and executed the Marshall Plan to revive Germany, using the Berlin Airlift, it espoused a trade policy that -- as the only powerhouse economy atop the world -- was easy on other countries to help rebuild the global economy.
While consumers are not expected to see big hits on most goods -- remember that only 14 percent of GDP involves imported goods -- there will be some price increases. They need to have tax cuts to cushion any blows they might notice, if people are to stay happy and the Republicans are to perform well in the midterms.
But the threat of tariffs has already elicited pledges of about $6 trillion in new or expanded factories or other presence in the U.S. before today’s announcements.
Of course, it’s up to Congress to make the tax welcome happen. The Senate passed their budget resolution Tuesday, so that discussions on how to resolve differences between the House and Senate version can
happen. Senators want to make the tax cuts permanent instead of sun setting like the last time. There will have to be resolution to issues like the SALT tax; any new tax breaks that Trump wants; additional lowering of tax rates and others.
A signal surprise this week, however, involved the Senate parliamentarian. It has been taken as gospel that the Senate parliamentarian has the final say on the contents of a reconciliation bill. Senate Republicans are holding that Sen. Lindsey Graham’s Senate Finance Committee has the legal authority to make the final determination. It could crucial in determining whether extending the tax policy of the last seven years is viewed as current or a new tax law.
When musing over your list to visit with members of Congress about, getting a pro-growth tax bill passed and signed by Memorial Day is a good goal. Then cut spending and the size of government.
Our address: Agribusiness Freedom Foundation, P.O. Box 88179, Colorado Springs, CO. 80908.
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