Canada implemented $20 billion in retaliatory tariffs on the United States Tuesday, responding to President Donald Trump levying $20 billion in tariffs on Canadian goods after trade talks between the two countries fell apart in August. (A tariff is a tax that a government places on goods coming into the country, and while importers pay the tariff, the extra cost is often passed on to consumers.)
Experts say that Wisconsin farmers – and, as a result, Wisconsin consumers – will be hurt by the tariffs from both sides. Here’s a breakdown on how the tariffs will affect Wisconsin farmers, and how you might feel the impact. [WPR]
🥛 Milk and Cheese
Wisconsin dairy farmers are especially worried about tariffs on milk and cheese that Canada placed this week. Canada is the second-largest customer for United States agriculture next to Mexico, having purchased $28 billion in agricultural goods last year.
Canada has placed a tariff of 50% on a variety of milk and cream products, and 25% on cheese and curds. Wisconsin dairy farmers say the tit-for-tat tariffs could hurt exports of milk products produced in the Midwest, of which there’s already an oversupply. The cost of milk is currently at record highs in U.S. grocery stores despite the oversupply, due to increased production and distribution costs. [USDA, Yahoo! Finance, eDairyNews, Chicago Tribune]
🧑🌾 The Potash Problem
The trade war also puts crop farmers in Wisconsin at risk by threatening their access to a common fertilizer known as potash. Canada is the largest producer and exporter of the potassium-based fertilizer, and 85% of potash used in the U.S. comes from Canada.
So far, Canada has left potash off the table for tariffs, but Ontario Premier Doug Ford has suggested that withholding potash would kill the U.S. agricultural industry “overnight.” Other premiers have pushed back against such an escalation, fearing it would lead to a long-term backlash. [WPR, Yahoo! Finance Canada]
🚜 Farm Equipment Woes
Most farm equipment is built from components made in both the United States and Canada. But Canada has levied a tariff on agricultural parts made in the United States, matching “dollar-for-dollar” a similar tariff imposed by the United States.
This will make the equipment more expensive at a time when farmers were already dealing with falling income due to other tariffs imposed by the Trump administration, and the war with Iran cutting off the supply of oil and fertilizer. As in the past, the combination of rising costs and shrinking foreign markets will result in higher prices for U.S. consumers, experts say. [Farm Progress]
