Pennsylvania's largest farm organization says it is concerned that President Trump's new tariffs could ignite a trade war that results in retaliation against U.S. agricultural products, hurting the state's $2.2 billion in annual revenue from farm exports.
"The concern here has been basically that there's a tit-for-tat, or whatever you want to call it, if we impose these tariffs," said Mark O'Neill, spokesman for the Pennsylvania Farm Bureau, which has 62,000 member farms and families. "If there is retaliation in other products, it comes down to food."
For now, however, the bureau is relieved at the administration's current call for Mexico and Canada to be exempt from the tariffs on steel and aluminum.
On Thursday, Trump ordered steep new tariffs on aluminum and steel, but exempted Canada and Mexico as "a special case" while negotiating for changes to the North American Free Trade Agreement. The 25 percent tax on steel imports and 10 percent on aluminum will take effect in 15 days. The president calls the excess of imported steel and aluminum a "travesty" that hurts American workers and industry.
But the farm bureau said the U.S. economy is interconnected and any trade war could ripple through its membership.
Nearly 60 percent of Pennsylvania's agricultural exports are to aluminum-producing nations and 17 percent go to steel-producing countries, the bureau says. Retaliation by those nations could hurt exports of beef, pork, cheese, hay or powered milk, for example.
Exempting Canada and Mexico is a big help, said the bureau's president, Rick Ebert. However, the president issued no assurance that would last. In the meantime, farmers remained concerned about a European response. Even though Pennsylvania farmers might not export products directly to Europe, many products grown here end up in food products shipped overseas.
"Higher tariffs make our products more expensive and less competitive," Ebert said, "which opens the door for other countries to replace the U.S. as a supplier of food overseas."
The state's dairy farmers are already hurting with a national milk glut that's been dropping prices for years. A trade war could push some over the brink, the bureau says.
Farmers were already on edge after Trump pulled the U.S. off the Trans Pacific Partnership, a large free trade agreement, soon after taking office. But since then, 11 other nations worked toward a new agreement they signed just this week, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.