Trump issues order to end tariffs on Brazilian food products

President Trump on Thursday issued an executive order that will remove the 50 percent reciprocal tariffs on Brazilian coffee, tea, beef, fertilizer and some other food products. The decision appears to be part of Trump’s attempt to reduce grocery prices. Brazil is the biggest provider of coffee to the United States and its beef is mixed with other beef to make hamburger. From a White House fact sheet, here is the full list of products on which the tariffs have been eliminated:

• Coffee and tea
• Tropical fruits and fruit juices
• Cocoa and spices
• Bananas, oranges, and tomatoes
• Beef
• Additional fertilizers (some fertilizers have never been subject to the reciprocal tariffs)

The International Fresh Produce Association (IFPA) said it “welcomes the administration’s decision to ease tariffs on Brazilian agricultural products.””Brazil is a key global supplier of fruits and other agricultural inputs that complement U.S. production,” IFPA said.

“Easing tariffs on these products — especially those that support year-round access to nutritious foods — is an important step toward ensuring they can enter the U.S. market without excessive duties. This action will help maintain the affordability of high-quality fresh produce for American consumers.”

USCA

United States Cattlemen’s Association (USCA) issued the following statement in response to a recent wave of policy announcements and trade decisions that have continued a trend of uncertainty within the U.S. cattle industry and livestock marketplace, including the cancellation of tariffs on Brazilian beef.

“With the national herd at a 75-year low, the domestic cattle industry is facing historic challenges. American ranchers are only now seeing prices that make their businesses sustainable; yet new signals from Washington risk undermining this critical progress.

“USCA recognizes that trade and tariff policies are complex tools that can be beneficial when wielded with long-term strategy and consistency. When used correctly, tariffs bolster the competitive viability of U.S. ranchers in their own market, protect the American consumers from inferior foreign product, and demonstrate national priority for U.S.-grown beef. However, recent actions, including a new agreement to clear the way for additional beef imports from Argentina and an executive order exempting beef from reciprocal tariffs, have created confusion and concern among U.S. ranchers. The most recent announcement on the cancellation of 40% tariff, following the earlier removal of the 10% reciprocal tariff, marks an inconsistent and unsafe trade strategy. Easing restrictions with Brazil, a country with a documented history of forced labor, deforestation, and product integrity issues in the beef sector, is alarming. These actions signal an increasing administrative focus on sourcing foreign beef precisely when domestic producers need clear signals for reinvestment,” said USCA.

“When Washington pushes policies that flood the market with imported beef, it sends a crystal-clear message to every American rancher: ‘Don’t invest.’ We cannot rebuild our domestic herd if every signal we receive tells us we’ll be undercut by foreign supply,” said USCA President Justin Tupper. “Our members believe in fair market competition, but they also believe in long-term survival. That survival depends on a national focus that zeroes in on building up an industry here at home that feeds families and strengthens our food security. Now is the time to invest in U.S. cattlemen—not to increase dependence on outside sources.”

USCA supports all efforts to restore fair competition and transparency in the beef packing sector including the recently announced DOJ investigation of the country’s largest packers. “We appreciate the Administration once again picking up the torch of investigating the ‘Big 4’ meatpackers,” President Tupper noted. “However, an investigation is only as good as its enforcement and pursuit. Past inquiries left producers without answers; we expect this time will be different in outcome, not just in intent. We urge the Administration to ensure this investigation leads to substantive action and real reforms.”

USCA stands ready to work with the Administration and Congress on policies that build, not bypass, U.S. cattle producers, said the news release.

R-CALF USA

R-CALF USA CEO Bill Bullard said his group is deeply disappointed that the president has reversed course on tariffs that are needed in order to encourage the investment by the cattle industry to rebuild and expand.

He said the result will be continued incentive for the packers to source cheaper imported product to displace domestic production.

As for the affect of the tariffs up to now, he said, “We believe it had reduced the volume of imports that the packers would have otherwise sourced from Brazil.”

He believes the added supplies (non tariff Brazilian beef) will reduce the incentive for the domestic market to expand sufficiently to meet national security needs.

Looking at the volatility of the market in the past 5 weeks, Bullard said solutions to exist. He urges the “removal of the monopolistic forces that have helped contract our industry for the past four decades.” He believes this can be achieved with enforcement of the Packers and Stockyards Act as well as anti trust laws.

Bullard also urges Congress to pass Congresswoman Hageman’s (R-Wyo) Mandatory Country of Origin Labeling bill. “We must provide our producers relief from these cheaper undifferentiated imports. Providing MCOOL may be a lifeline that producers will need in order to compete in a marketplace that is awash in undifferentiated imports,” he said, adding that polls and surveys indicate a strong desire on the part of U.S. consumers to know the origin of their beef. He said the last time MCOOL was implemented, “there was a strong correlation between higher cattle prices and MCOOL.”

Another solution is managed trade as opposed to rules-based trade. He explains that this would include meaningful tariffs rate quotas to limit the quantity of imports allowed. “Rules-based trade has caused the U.S. to become more and more dependent on imported beef in the domestic market,” he said.

With respect to the recent actions of the administration to increase the amount of Argentinian beef entering this country, and to lower tariffs, and the subsequent multiple limit down days on the feeder cattle board and in the cash market, it feels like a huge step backward. “We thought we were on a course of producing domestically more of what we consume in order to strengthen the US economy. now we seem to be backpeddling on that objective. We’re concerned that there remains far too much influence by the very entities that have supported the contraction of our industry,” he said.

NCBA did not immediately respond to a request for comments.

-The Hagstrom Report with added comments