A senior director of government relations at the American Farm Bureau Federation (AFBF) says tariffs will likely remain part of President Trump’s trade strategy, regardless of the U.S. Supreme Court decision.
Dave Salmonsen says tariffs bring countries to the negotiating table. “We’ve seen deals with the United Kingdom and several of the countries in Southeast Asia: Japan and South Korea, the recently concluded deal with China, which is gonna hopefully get them in the market purchasing soybeans again.”
Trump is the first president to impose tariffs using the International Emergency Economic Powers Act (IEEPA), which allowed him to issue tariffs quickly and broadly earlier this year.
This week, SCOTUS heard arguments to determine whether IEEPA can legally be used to impose tariffs. IEEPA is a U.S. law that grants the president authority to regulate international economic transactions in a national emergency. “It came down to the word regulate. They went back and forth a lot. Does the word regulate also include taxing or putting on a tariff?” Salmonsen says it’s hard to tell how the justices perceived the arguments and how quickly they’ll respond.
“Decisions could be reached in a matter of weeks, or it could go to the end of their term in June before we get a decision. So, we have to wait.”
But he says the outcome could still matter for farmers and ranchers. If the court decides IEEPA can’t be used for tariffs, it puts U.S. agriculture at risk for trade retaliation. “Will countries say: well, you know, maybe those deals we made aren’t the deals we really wanted to make or there’s no basis for them anymore? Other countries will have to react. Our markets are impacted by U.S. trade policy. We have an interest in the outcome of this case.”
Salmonsen says it could also challenge funding for farmer ad-hoc payments.
“They would have an impact. I think the IEEPA tariffs are about maybe half of what’s coming in every month, but there would be an impact on revenues. So that is something to consider.”
However, he says President Trump can still use additional authorities outside of IEEPA to impose trade tariffs.
EDITOR’S TAKE:
Let’s be candid, we all know a “Plan B” and “Plan C” are under consideration as we speak. There should be no doubt in anyone’s mind that President Trump will find a way to continue using tariffs as part of his strategy to re-energize and strengthen the U.S. It is an integral part of his negotiating style and a key to his ultimate success in building and improving our stature on the world stage. Will the Supreme Court rule for or against the use of IEEPA, no one knows and only time will tell. Will President Trump continue to use tariffs – count on it.
We also know that part of the tariff funds flowing into the U.S. Treasury will be used to provide aid to farmers/ranchers impacted by the trade negotiations with China. Look for that money to start arriving in the mailbox of farmers/ranchers in your area, even before year end. Stay in touch with those farmers/ranchers via email, website, newsletter, advertisements or whatever mechanism you like to use. Be sure to emphasize your ability and willingness to help them with their new purchase. Don’t forget to mention AgPack®, with up to nearly $50,000 in exclusive rebates and discounts. And, by all means, emphasize the new tax provisions that allow 100% depreciation in the year of purchase.
