The People of America's Oil and Natural Gas Indusry

When Tariffs Become a Food Discussion

Mark Green

Mark Green
Posted July 25, 2018

Tariffs and quotas on imported steel and other products appear to be moving from a debate in Washington to Americans’ dinner tables, as farmers and others in the human food chain voice concern that a trade war – tariffs and retaliatory measures by other countries – is impacting food costs.

We’ve explained why imposing tariffs on steel could affect domestic natural gas and oil, potentially increasing costs and/or causing delays in energy-related projects, including pipeline construction. Since energy is involved in virtually every aspect of modern life, it’s not hard to see how such impacts could reach consumers.

At the same time, we’re starting to see articles suggesting that the tariff/trade war could impact food prices – which is probably why most Americans said tariffs would be bad for the country in Pew’s latest survey

pew survey finds most americans oppose tariffs

Indeed, farming is among a growing list of sectors that could be affected by tariffs on imported steel and aluminum because there’s lots of metal in farm equipment. From CNBC:

In March, the Pennsylvania Farm Bureau warned about backlash from the steel and aluminum tariffs. In a statement, the group's president, Rick Ebert, said that “higher tariffs make our products more expensive and less competitive, which opens the door for other countries to replace the U.S. as a supplier of food overseas.” The state has a large dairy industry, which has already suffered from an oversupply problem and a continued shift by consumers away from dairy milk.

In a commentary for Reason.com, food lawyer Baylen Linnekin writes that food prices are rising and are likely to climb even more because of the punch-counterpunch of a trade war. Tariffs, Linnekin writes:

… cost jobs; hurt domestic and foreign producers, consumers, and taxpayers; put the petty interests of government over those of the public; and are prone to spinning out of control. To paraphrase Nobel Prize-winning economist Milton Friedman, tariffs are bananas. Tariffs tend to make almost no one better off and—thanks to the ability of other countries to retaliate—make most everyone worse off. They hurt those who engage in commerce—producers, employers, sellers, consumers, and taxpayers alike—at home and abroad.

It’s a misguided policy and, as we’ve said, one that especially works against the administration’s laudable goal of U.S. energy dominance. Marty Durbin, API executive vice president:

“[Steel] tariffs threaten the affordability and abundance of energy produced in the United States, energy that powers our economy and creates well-paying jobs for American workers. The administration should reconsider their trade policy decisions.”

In a modern economy of supply and demand, where just about everything is connected to one thing or another, tariffs can have broad impact on energy and other consumer items, including food – which no doubt will elevate the issue’s profile at Americans’ dinner tables.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.