Like an aggressive hog in the show ring, U.S. trade policy is attacking every other participant for existing near its space. For anyone who has ever watched a hog show with an aggressive hog, there are no winners or losers in the fights, just a bunch of bruised and annoyed animals. Since January, U.S. trade policy has been fixated on tariff tax increases, compelling consumers and trade partners to leave the ring bruised and annoyed.
These tax increases are not a strategic tool but simply fuel volatility. In the short term, this policy is not beneficial to America, especially American farmers. Though we may say, “To the victor go the spoils,” the only thing agriculture wins from a trade war of this scale and strategy is spoilage, as perishable products wait for an end destination. Just look at Idaho’s experience with reciprocal tariffs during the first Trump administration. There were a couple of short-term brags, but the failures are still accumulating costs.
In 2018, the threat of tariffs leveraged small improvements in trade agreements with Mexico, Canada, Japan, and China and motivated partners to the negotiating table for a few Idaho products, like potatoes. But most commodities, including potatoes, paid the million-dollar price tag of retaliatory tariffs. The dairy industry faced significant price cuts, resulting in direct payments to dairies. Wheat also became less competitive on the global market due to retaliatory tariffs, losing market share to competitors, which takes years to regain.
Though the president claimed that China paid the tariff bill on products like steel, aluminum, washing machines, solar panels, and other goods, it was retailers and consumers who absorbed the tax on goods. But despite millions of Americans paying this tax increase, it wasn’t consumers who saw rebates. A few farmers with political leverage snagged 92% of the tariff revenue into relief payments, providing another revenue stream to fuel the unprecedented farm aid, but the relief wasn’t consistent or enough to make up for the trade war damage. This history is likely to be repeated with the President’s new, larger Trade War.
But here’s the frustration: it wasn’t only farmers who were hurt during the trade wars. Main Street USA was damaged significantly as businesses using tariffed goods lost sales, and the entire agricultural supply chain saw economic impacts, including job losses and costs to the average household of at least $300.
A 2024 study concluded that despite claims to help the American heartland, the 2018-2019 tariffs failed to provide relief. Import tariffs had “neither a sizable nor significant effect on US employment in regions with newly-protected sectors [and] by contrast had clear negative employment impacts, particularly in agriculture.”
With Idaho’s cash crop receipts down 6% year-over-year in 2024 and the state’s growing export markets (14% increase YOY), market instability from the trade war will be damaging. Idaho haystacks from 2024 are still unsold, while export-focused hay presses turn off machines and lay off workers. Wheat piles sit waiting for movement to ports as the new crop approaches harvest, because planting decisions were made last fall. Most Idaho commodities, like dairy, meat, and potatoes are feeling the effects of instability.
Though the current economic instability will hurt Idahoans, Idaho farmers should have no expectation that any relief packages targeted at agriculture will overpower the economic losses from another trade war. Idaho received 1.4 percent of total government payments to agriculture in 2020, and what was received was pennies on the dollar for industries facing losses.
Farming’s annual production cycle leaves little room for market responsiveness, especially when tariff announcements change weekly. Economist Brett Wilder of the University of Idaho said, “We’re in this window where people are deciding what crops they’re going to plant. People have to make that decision right now and live with that decision through the rest of the year, even if something changes next week.”
With the recently announced 90-day pause, Idaho agricultural producers can only wait and see, hoping the glut of products moves enough in the next three months to prevent spoilage of the new crop.
Admittedly, the aggressive hog has reason to be annoyed at some participants, but the current trade tactic is failing American businesses, farmers, and most importantly citizens.
Yes, improvements in the trade deficit, protection of environmental concerns and labor reform, and boosting manufacturing and critical industries are all concerns of many Americans that need addressing. But, as history has repeatedly shown, tariff tax increases will only cause products and work to spoil as America watches trading partners leave our show ring.
Madi Clark is a Senior Policy Analyst for the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming. Online at mountainstatespolicy.org.
