Corn and wheat trade vulnerable to Trump's tariffs?
President Trump's arrival at the Oval Office has created large uncertainties regarding world trade because of his policies regarding reciprocal tariffs.
The countries in the diagram below, illustrates 10 countries that stands for approxamtely 60% of exports in the United States.
Retrieved from: https://investigatemidwest.org/2025/02/12/president-trumps-tariffs-bring-return-of-uncertainty-for-americas-farmers/
The United States are Mexico's biggest trade partners. According to the U.S. The Department of Agriculture, Mexico exports approximately 92% of their goods in this sector to the United states.
If the countries affected by the tariffs decide to “counterattack” by imposing tariffs on american goods, it may be a step towards trade war and large uncertainties in the world of commodities.
The tariffs imposed on Mexican goods can cause difficulties also for American farmers, as they will face economic losses due to the tariffs, if Mexico imposes retaliatory tariffs, and forces Mexicans to look for new buyers.
Beyond Mexico, other key importers of U.S. wheat and corn, such as China, Japan, and the European Union, may also seek alternative suppliers in response to ongoing trade tensions. Countries like Brazil, Russia, and Ukraine are among the biggest producers of wheat and corn and have been expanding their grain production and could seize the opportunity to capture U.S. market share. As American agricultural exports become more expensive due to retaliatory tariffs, global buyers may shift their purchases to these competitors, leading to a long-term decline in the U.S. share of the global wheat and corn market.
If U.S. farmers lose key export markets, will they be able to find alternative buyers, or will they be forced to scale back production?
Sources:
https://www.fastmarkets.com/insights/us-corn-wheat-export-sales-rise/
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