The Independent Center's polling is straightforward: independent voters rank affordability as their primary concern. This issue propelled President Trump to his second term. Yet we are seeing a continued rise in prices of our own making.
The Big Picture
In general, tariffs raise prices for Americans. The only good use is to protect infant industries, and even then, there are many economists who would have my head for saying that. As a reminder, Paul Krugman, Milton Friedman, Karl Marx, and Friedrich Hayek, each representing vastly different economic schools, agreed that tariffs are counterproductive and are typically a net negative on an economy.
We import many agricultural products from our nearest neighbors, Canada and Mexico. This relationship makes sense because they are geographically close, and we have spent the years since 1994 building a comprehensive free trade relationship, first through the North American Free Trade Agreement and then its successor, the US-Mexico-Canada Agreement (USMCA) negotiated under Trump's first administration.
The last 6 weeks have been challenging to follow tariff actions as the White House has regularly applied and suspended them. USA Today has maintained a relatively up-to-date resource to help keep the timeline straight.
We've talked about trade wars and the impact of tariffs on auto manufacturing at the Independent Center. We've also talked about the importance of the Farm Bill. Let's do a deep dive into food and agriculture.
Zooming In
There are a number of inputs that affect the price of food. Weather has always been a fickle partner in agriculture, but now so is trade. Fertilizer prices were already up thanks to the Russian Invasion of Ukraine. The US, Russia, India, and Canada are the four largest fertilizer producers. While we are the largest producer (2022 data), according to Census Bureau Trade Data, we import about $10 billion in fertilizer and about $2 billion in pesticides (2024 data). These just got 10% more expensive, at minimum. To dig down just a bit deeper, from Reuters:
The US imports 90% of the potash its farmers use, with 80% of those imports coming from nearby Canada, and it cannot replace that with domestic production. "Full pass-through of the 25% tariff could increase prices by more than $100 per ton for (potash) supplies sourced from Canada," said a February 4 analysis by a team from the University of Illinois and Ohio State University.
While we make about a third of the fertilizer we use in the US, that figure doesn't quite explain just how reliant we are on some of our neighbors.
So how much agricultural product do we import from abroad? As with most data questions, it depends on your source. I'm using the USDA Foreign Agricultural Service's Global Agricultural Trade System data in this piece. The US Imported just shy of $265 billion in agricultural products in 2024. Canada and Mexico made up just shy of $90 billion, or just a smidge over a third of our total agricultural imports. On the Export side of the ledger, the US exports $175 billion to the world and $59 billion to Mexico and Canada.
Those are all some nice aggregate numbers on agriculture as a whole, but let's drill down and look at imports from Mexico in 2024. The salsa (starting from fresh tomatoes - $2 billion, onions - $352 million, jalapeños - $166 million, cilantro - $95 million) got more expensive at happy hour. So did the guacamole ($3.5 billion in imported avocados) or your morning avocado toast. If you like tequila, we imported over $5 billion and another $6.2 billion in beer. The Super Bowl parties and fall tailgating just got more expensive. That $2 billion in tomato imports will affect more than just salsa, everything from pizza and pasta sauce to your hashbrowns at Waffle House. Speaking of breakfast foods, if you are a fruit parfait for breakfast kind of person, the price of berries is going up, we brought in $3.5 billion from Mexico.
Independent Lens
The cost of food is something that impacts everyone. Even lifestyle sites are talking about how tariffs are complicating things for home cooks. A recent poll by The Hill suggests that 73% of Americans feel financially stressed. Which makes sense given the years of inflation we have experienced. The real kicker, though, is the poll found that 66% of Americans say the tariffs are adding to that stress. The Independent Center's polling is also pretty straightforward: independent voters rank affordability as their primary concern. This issue propelled President Trump to his second term. Yet we are seeing a continued rise in prices of our own making. While some lawmakers have attempted to roll back the president’s tariffs, for the most part, Congress just sits around phoning it in.
