Mar 13, 2025Millions of dollars in US potato exports hang in balance of tariff tug-of-war
Millions of dollars in U.S. potato exports could be in the crosshairs in a tariff tug-of-war with major trading partners Canada and Mexico.
President Donald Trump imposed a 25% tariff on Canadian and Mexican goods March 4, only to pause that penalty two days later by issuing temporary exemptions for a wide range of goods from both countries. The exemptions, which apply to goods compliant with the United States-Mexico-Canada Agreement and include fresh and processed potatoes, will last until April 2, when Trump is poised to enact reciprocal tariffs on nations with import taxes on U.S. goods.
Mark Klompien, United Potato Growers of America CEO and president, said such tariffs could increase supply imbalances of fresh U.S. potatoes.
Klompien joined National Potato Council CEO Kam Quarles and Matt Lantz, senior vice president, global access at agricultural access, research and marketing firm Bryant Christie, on a March 7 Eye on Potatoes podcast titled “The Moving Tariff Target” to discuss the volatile issue.
For the last full crop year, Klompien said the U.S. exported 3.2 million cwt in fresh potatoes to Canada, while Canada shipped 7 million cwt to the U.S. The U.S. exported 5.8 million cwt to Mexico, and expected that to increase to 6.5 million cwt this year, he said.
Cwt stands for hundredweight, a unit of weight equal to 100 pounds.
“Fresh potato prices are inelastic,” Klompien said. “Small changes in supply normally have a much larger impact to the grower side of the equation.”
Quarles emphasized on the podcast that 20%, or “one in every five rows” of U.S.-produced potatoes — raw or processed — must be exported to maintain a supply balance.
“In some of these markets, it’s not even having the music entirely stop, but it could just be having the music slowing a little bit that causes a big pileup in raw product that otherwise was going to go to frozen or otherwise was going to go to Mexico,” Quarles said.
Lantz provided examples of the effects of past tariffs. In 2009, he said the Mexican government imposed a 20% tariff on U.S. fries because of a tracking dispute.
“In 2008, we exported $83 million in fries,” he said. “The next year, we exported $49 million.”
China has also been a target of U.S. tariffs and has responded with retaliatory measures on various U.S. goods. In 2018, Lantz said China was a $91 million export market for U.S. fries. Because of tariffs as well as other issues including Chinese potato production, it has since become a $19 million market, he said.
The Mexican market fully opened to U.S. potatoes in March 2022. From October 2023 to September 2024, U.S. fresh potato sales to Mexico totaled $134.9 million, or 41% of the value of total U.S. fresh potato exports for that period, according to USDA data.
Lantz said Mexico is currently a $319 million market for U.S. fry exports, while Japan is a $400 million market.
Negotiations to fully open the Japanese market to U.S. fresh potatoes have dragged on for years. Reciprocal tariffs could present an added complication, Klompien and Quarles said.
Quarles acknowledged the threat of tariffs have helped bring countries to the negotiating table in the past and advanced trade agreements such as USMCA, but said permanent sanctions could hurt U.S. potato producers.
NPC passed a resolution during its Washington Summit in February urging the Trump administration to “avoid the long-term potential for tariff retaliation,” while Quarles has met with Congressional leaders to discuss tariffs and other topics affecting U.S. agriculture, including urging the passing of a new farm bill.
“If you’re placing tariffs on imported goods, you’re placing them on inputs — like fertilizer, like crop protection tools — essential items that are necessary for American growers to purchase in order to grow a crop for the coming year,” Quarles said during the podcast. “Harming your own producers by elevating those products is not a great outcome.”
— Melinda Waldrop, Managing Editor
