KENNEWICK — Potential price increases for consumers were top of mind when President Trump ordered 25% tariffs on goods imported from Canada and Mexico and a 10% tariff on goods imported from China.
For now, the tariffs on Canada and Mexico are paused until March. But the tariffs on Chinese goods started this week and China imposed retaliatory tariffs effective Feb. 10.
For the Mid-Columbia, retaliatory tariffs could be the larger story because of our region’s agricultural-driven economy.
And the tariff back and forth comes at a difficult moment.
Growers and processors are finalizing plans for the 2025 growing, harvesting and processing season.
Zippy Duvall, president of the American Farm Bureau, sounded the alarm about the harmful effects of tariffs on farms in a Feb. 2 statement.
“The uncertainty hits just as operating loans are being secured and spring planting approaches, leaving farmers in a tough spot,” he said.
Local farmers and processors ship millions of dollars worth of frozen french fries, apples, cherries, hay, onions, beef and other ag products to all three countries targeted for tariffs.
Tariffs drive up the cost of imported goods. Retaliatory tariffs drive up the cost of U.S. products to foreign customers, affecting markets in a myriad of ways.
The full potential impact on Washington if the tariffs end up taking effect can’t be known.
However, prior to the pause, Canada identified $30 billion of U.S. goods for 25% retaliatory tariffs, including nearly $300 million worth of Washington grown and produced agricultural products
Washington, one of the most trade-dependent states in the country, shipped $11.3 billion worth of agricultural produce and products overseas in 2023, according to the most recent figures from the Washington state Department of Agriculture.
$300M on line in Washington
While the tariff talk is paused with Canada and Mexico, both promised retaliatory tariffs. Canada’s list includes chickens, dairy, peaches, legumes, roasted coffee, some beer and wine, watermelon, spices and more, the state’s ag department told the Tri-City Herald.
Mexico promised to retaliate with tariffs but did not release a list of targets, the state’s agriculture department said.
The impact of retaliatory tariffs is real, and could be painful.
In 2018, the state ag department calculated that $650 million Washington ag exports to China and Mexico were at risk because of tariffs enacted in retaliation for U.S. tariffs on steel, aluminum and intellectual property during the first Trump administration.
A year later, Washington farmers got $50.7 million in federal aid payments to compensate for their losses due to the trade dispute — a figure industry leaders said fell “well short” of the actual losses farmers suffered.
Planting season ahead
It is not clear how potential trade wars or the uncertainty around the pause will affect planting decisions being made now.
The Washington Potato Commission said it wouldn’t have answers about the impacts of potential tariffs — or retaliatory tariffs — until early March.
A key seed producer with operations in Pasco said most seeds are bought by January, making it difficult to assess if growers will cut back.
While there’s good reason to expect tariff-driven trade wars with Canada and Mexico won’t happen, both are important trade partners for Washington, as is China.
Washington apples, other exports
Mexico bought nearly $200 million worth of Washington apples in 2023, making it the top buyer of the state’s most valuable — and visible — agricultural product.
Canada was the second biggest buyer, spending $132 million.
Frozen french fries, produced from locally grown potatoes processed in more than a dozen plants across the Mid-Columbia, are Washington’s top ag export, were worth $1.1 billion in 2023, according to the state agriculture department.
Fish and seafood were second at $1.1 billion and wheat was third at $684 million.
Canada is Washington’s No. 1 customer for ag products buying $1.3 billion worth of goods in 2013. It was the top market in several individual categories — fresh onions and sweet cherries. Its purchases totaled $1.3 billion in 2023.
Its shopping list: Fish and seafood ($321 million), apples ($132 million), fresh onions ($70 million), frozen fruits ($63 million) and sweet cherries ($57 million).
China is Washington’s No. 3 customer for ag products after No. 2 Japan, which is not currently a tariff target. It bought $857 million in Washington ag products in 2023 and was the top market for beef, pulses, hides and pork.
The value of purchases by China: Beef ($207 million), fish and seafood ($166 million), wheat ($105 million), hay ($103 million), pulses ($42 million), sweet cherries ($34 million,) and hides $30 million).
Mexico is Washington’s No. 4 market for ag products with $587 million in purchases in 2023. It is the top market for apples, nuts, fresh pears and roasted coffee.
The value of purchases by Mexico: Apples ($199 million), frozen french fries ($106 million), dairy ($52 million), nuts ($42 million), fresh pears ($41 million), and roasted coffee ($26 million).
