US actions raise agricultural trade costs globally

Significance

US President Donald Trump last month targeted Canada’s supply management system for dairy, poultry and eggs as an example of unfair restrictions on agricultural exports to that country. Meanwhile, Canada, Mexico, China and the EU, the largest US farm export markets, are imposing retaliatory measures on key agricultural and food imports from the United States in response to US tariffs on steel, aluminium and Chinese manufactured goods.

Impacts

• The tariffs will disrupt agricultural markets, trade and supply chains globally, and commodity price volatility will increase.
• Food security and price stability worries will rise and may spark a vicious circle of more restrictions and interventions by governments.
• Chinese retaliation is targeting US agricultural and processed food exports, affecting activity in ‘swing’ states ahead of the elections.