Commercial War, the complete crisis of tariffs, “says US farm exporters

The clock is marking trade agreements that the United States will need Attack with many nations, especially China, to avoid what Trump’s secretary has described as A war of “unsustainable” rates. But in the agricultural sector of the United States, the damage has already been done and the economic crisis has already begun.

American agricultural exporters say The global reaction of President Trump’s rates It is punishing them, especially a decrease in the Chinese purchase of American agricultural products, which leads to export orders and canceled layoffs. Peter Friedmann, Executive Director of the Agricultural Transportation Coalition, a leading export trade group for farmers, tells CNBC The number of canceled purchases of American agriculture should not be described as about a crisis. “It’s already a complete crisis,” he said.

The data published by the United States Department of Agriculture revealed Thursday that China made its greatest cancellation of pork orders since 2020, stopping a shipment of 12,000 tons of pork.

AGTC says that its members are already sharing “massive” financial losses as a result of the commercial war, depending on the reports it receives from the member companies.

An exporter of pulp and wood cardboard informed the commercial group the immediate cancellation or the retention of 6,400 metric tons in a warehouse and a retention of 15 wagons sitting in what is known in the supply chain as “delay”, when rates are charged for a delayed movement of goods. Meanwhile, the exporter said that there are 9,000 metric tons in the water to China that is expected to arrive on May 13 and in front of the threat of an expensive detour to the stores in Chinese United or other countries, since Chinese buyers can reject the load and leave it in the port.

A grass seed exporter told AGTC that he received two weeks in advance that Chinese clients canceled eight charges even though the boat reserves were already in place.

In a recent meeting of interested parties at the headquarters of the Port of Oakland with respect to the tariff impacts, the executive director of the port of Oakland, Kristi McKenney, warned that a recession induced by the rate in the load volume of the port, either by the slowdown of the imports or the losses of the export of retaliation, could finally endanger the stability of the work of the region and the economic health of the region.

McKenney cited retaliation rates on American agricultural products, as well as manufactured goods, as essential exports that move through Oakland. Exports include almonds, beef, pork, dairy and recycled materials, much of which is intended for Asia. China is located as the main import partner of the port and the third export partner, which represents 29% of Oakland’s total commercial volume.

Unlike many US ports that are strongly inclined to imports, Oakland is unique to maintain a balance of about 50/50 imports and exports. That leaves Oakland worried that tariff reprisals would directly affect their main export destinations: Japan, Taiwan, China and South Korea, and could significantly erode the California market share for perishable and high value products.

The Port of Oakland is the refrigerated export gate number 1 in the USA. And almost all the contained load that moves through the north of California crosses the port of Oakland.

“Many local and union works depend on the solid port shipping operations, including docks, truck operators and warehouse workers,” said Democratic Party Lateefah Simon’s congresswoman. “Support for intelligent commercial policies that raise workers and lower costs for Oakland working families, not an illogical and retaliation commercial war.”

Agricultural exporters warn that there are no additional markets to quickly replace China’s demand and absorb volume, and that is already affecting prices.

“We have diverted employees and production to another production (less profitable) and drastically slow down the purchase of independent vendors (wood, truckers, sawmills),” a wood exporter reported to AGTC. Some products have already decreased 20% in the market value, the wood exporter reported, which said it will influence inventory planning and future investments. “The US market was stable and improved, but now flooded with the inventory of China’s old products,” he added.

A fodder exporter like hay and straw that is a great business for American farms that supply livestock operations abroad reported 68 blank exits after Trump’s “day of release” that limits its ability to export fodder products, with vessel space for exports restricted in cargo ships that still call the US ports.

“The concern is that the space of the container that remains will be the most expensive/most expensive services/’premium’ that our product cannot absorb without selling without loss. Being a high volume and low value article, we cannot pay drastic increases in the oceanic load,” the exported fodder informed AGTC.

There has been a strong decrease in China to the traffic of US vesselsLess 22.15% Rear Week and 44% year after year until April 14, according to the Vizion Global Oceanic Reserves Trashorer.

“What we have seen in the last two weeks is a continuous correction in the reserve of the demand for US imports, especially US imports of China,” said Ben Tracy, vice president of strategic business development in Vizion. “Now we are seeing that this translates into a fall in the exits too,” he added.

He was told to a hay exporter in the Washington center that sends a large amount of its production to Hong Kong and Continental China that redirected most of the exports sent in the last two weeks to Japan, Dubai, Taiwan and some Chinese ports. These changes were a cost for the company, and told AGTC: “It is not sustainable, no one can replace all the volume that China buys.”

The hay exporter immediately ended all orders in process, and has begun layoffs.

“We had to adjust our employee count in 12 people. This represents a quarter of our total employees,” he wrote. The company said that it has communicated with customers and employees the hope that “the hurry and reckless decision making at the top of our country will be reversed, relieving the deep problems we face at this time.”

In addition to the reaction of the rate, agriculture faces another imminent financial challenge with the measures of the recently announced ships approved by the US trade representative, with Chinese manufacturing ships that call the US ports to be Port rates collected more than $ 1.5 million Starting in autumn.

Bulk agriculture was carved in the port rates imposed under the USTR rule, but agriculture sent in containers is not exempt from rates. Friedmann said that an exemption is essential because the most valuable agricultural exports are sent in containers, not in bulk.

Container exports include refrigerated beef, pork, corral birds, fruits, vegetables, dairy and processed foods such as fries. Cotton, fodder (hay, alfalfa), nuts, dry dairy, wood, paper and soy for human consumption are also sent in containers. “The efforts to exempt all exports from agriculture, including containerized agriculture, continue,” Frejmann said.

According to the US commercial data, the participation of American agriculture in containers is approximately 25% per volume and almost 55% per value.

The USTR did not respond to a CNBC request for comments on tariff exemptions for container agriculture.

“Much of our future is in the hands of so few,” he wrote a hay exporter to AGTC. “We claim that those few take a very careful look of what can be done to keep shipments flowing while calculating commercial imbalances and perceived differences.”