Navigating tariff turbulence presents a complicated path

The international trade landscape — particularly concerning the frequently shifting tariff environment — is undergoing significant volatility and uncertainty, creating a challenging atmosphere for the U.S. potato industry and the entire agriculture community.

In a recent “Eye on Potatoes” podcast, I talked with international trade expert and NPC consultant Matt Lantz just hours after President Donald Trump announced a 90-day pause on “reciprocal” tariffs on dozens of non-retaliating countries while raising duties on China to 125%.

In light of the evolving situation, NPC continues to emphasize the need for a measured approach amidst the political turmoil.

USMCA STABILITY

When tariff increases were initially floated, a major point of concern was the potential impact on trade with Canada and Mexico, two of the largest export markets for U.S. potatoes. Disruptions here could quickly lead to product backing up and negatively affecting grower returns.

Fortunately, recent clarifications indicate that goods compliant under the U.S.-Mexico-Canada Agreement (USMCA) will maintain their current benefits, meaning U.S. potatoes should retain zero-duty access to these vital markets.

GLOBAL PICTURE

While USMCA appears stable, the broader tariff situation presents both risks and potential openings. Retaliation from other nations remains a significant concern for U.S. growers.

Furthermore, tariffs are not just about exports; they can impact growers through increased costs for essential inputs. Much of the fertilizer, crop protection tools and components for sophisticated farm equipment are imported and could be affected. Even materials such as steel and aluminum used for potato storage could see price increases, adding pressure on growers’ bottom lines.

However, the current focus on trade could also create leverage for positive change. NPC sees potential opportunities to address long-standing market access issues.

Japan, for instance, has shown interest in trade talks in response to President Trump’s tariff threats, which could advance the priority goal of fresh potato market access. There is also hope for reducing or eliminating tariffs in markets like Vietnam (currently 12% on fries for the U.S. vs. 0% for competitors under TPP-related agreements) and the Philippines (10%).

VITAL ROLE OF TRADE

NPC has also been working with both the White House and Congress to communicate the fundamental importance of international trade for the health of the U.S. potato industry.

Agriculture, particularly potatoes, has historically been a major beneficiary of trade agreements. Exports have grown significantly, contributing nearly $5 billion annually to the U.S. economy and supporting more than 34,000 jobs, according to a Michigan State University study commissioned by NPC. Additionally, expanded access to markets like Mexico has been crucial, especially in years with large crops, helping to stabilize prices.

Navigating this complex and shifting environment requires careful analysis, not knee-jerk reactions to headlines. NPC continues to follow this issue very carefully, looking at the facts and potential impacts specific to potatoes.

Find the Eye on Potatoes podcast on Apple Podcasts, Spotify and other platforms.

Kam Quarles is CEO of the National Potato Council.