Media Contact
Adam Allington
Uncertainty over the prospect of a global trade war is fueling stock market volatility as President Trump plans to unveil sweeping “Liberation Day” tariffs scheduled to take effect on Wednesday. The U.S. Department of Agriculture is preparing to provide financial assistance to farmers impacted by potential retaliatory tariffs.
Christopher Barrett
Professor of Applied Economics and Policy
Chris Barrett, professor of public policy and economics at Cornell University, says even with the supposed bailouts, farmers can expect a number of headaches.
Barrett says:
“It’s just a sad situation. It’s unclear what problem is getting solved by raising lots of tariffs by a big margin; but it’s clear this will cause problems.
“It will hurt consumers. A healthier diet will get immediately more expensive because for products like fruits and vegetables, the import taxes – that is what a tariff is – pass through almost entirely to consumers.
“Indirectly, increased tariffs will also hurt growers and processors because other countries will almost surely retaliate. That will hit farmers hard because most have already made 2025 planting decisions, so they have already committed to specific crops intended for established markets.
“Those markets are hard to claw back, so this will benefit competitors like Brazil and Canada that produce and export many similar products of comparable quality. And farmers will have to find new buyers, which likely means lower prices, higher costs of contracting and delivering products, or both. In short, farmers are likely to see lower profit margins.
“The government can cover some of the losses through bailout payments. But those rarely match up well with farmers’ actual losses, so it will help some people, but somewhat haphazardly. And bailouts are expensive at a time when the government is running an unsustainable deficit and federal government debt is at an all-time high.”
