Anticipating the impact of new tariff developments

A recent run of trade deal announcements in July and a new round of tariffs beginning Aug. 1 are sending a “challenging” mix of signals to the US food industries, analysts said, as well as to US farmers.

Six months into his return to the White House, President Donald Trump continues to take a hard line on international trade.

Though specifics have been few, recent efforts include the frameworks for new agreements with top trading partners such as the European Union and Japan, which both ultimately accepted a 15% added tariff rate on imports to the United States. That figure appears to be a standard the Trump administration is working toward in its ongoing negotiations with a host of other nations.

“It’s challenging to pick out a lot of winners as the tariffs overall will achieve a mix of higher consumer prices along with lower profits and cost cutting, all of which pressure consumer spending,” said Arlin Wasserman, founder and managing director of Changing Tastes, a US-based food industry consultancy that advises on supply chain disruptions and ingredient substitutions. “The idea of a global tariff of 15% on all imports to the US as a baseline will mean either companies are less profitable or consumer prices go up.”

As a carrot or stick in trade negotiations, the White House has promised a new round of tariffs beginning Aug. 1 for countries that have yet to strike deals. Despite delays to previous tariff deadlines set out by the president, in comments July 29 he promised to follow through with his latest threats.

“We’re going to be setting a tariff for essentially the rest of the world, and that’s what they’re going to pay if they want to do business in the United States,” Trump said.