News

Global trade could get more complex under incoming Trump administration

The head of RaboReasearch Food and Agribusiness for North America says global food and ag trade could be more complex under the incoming Trump administration. Roland Fumasi says the proposed tariffs are a triple-negative and concerning to the economics of the food and ag sector.  “Any import tariffs are inflationary for certain farm inputs,” he says.  “So that raises the cost of production.”

He tells Brownfield that tariffs also have additional negative impacts on the overall economy. “Retaliatory tariffs are a direct drag on our F&A exports,” he says. “But then there’s also this indirect drag on F&A exports due to the stronger dollar that’s likely to occur because of interest rates staying higher for longer.”

Fumasi says consumers will be impacted if across-the-board tariffs are implemented with trading partners like Mexico. “Berries, limes, and avocados are critical,” he says. “Frozen fruits and vegetables coming into the US and Mexico is a major supplier.” Mexico is the primary foreign supplier of fresh fruits and vegetables to the U.S., and imports in 2022 were valued at nearly $19 billion.

He says there is the potential for tariffs to lead to a rebound in inflation and a slowdown in economic growth, which could ultimately lead the Fed to pause its rate-cutting in 2025.

AUDIO: Roland Fumasi, RaboResearch Food and Agribusiness