What to expect from the incoming administration with Donald Trump back at the helm has been the big question in agriculture for months.

“I think if we learned anything from his time in office, it’s that campaign promises are followed through on. The man’s not afraid to execute on the things that he talked about, and even in recent weeks there’s already been talk about tariffs,” said Mike North, president of the producer division at Ever.Ag.

“I think we should fully expect that they’re going to come. It’s a question of how we’re going to leverage them … ,” he said during the latest Dairy Stream podcast.

China was obviously the target of tariffs during Trump’s first presidency, with a goal to balance trade between the two countries, he said.

“We went through some really painful times in agriculture through 2018 into ’19 as we went to the negotiating table with China to ultimately get a deal done,” he said.

The good news is that deal is done, the same two leaders are in power and he expects Trump to tell Xi Jinping, China’s president, to get going with China’s purchasing obligations.

Trade with Mexico

“The place where I start to sweat a little bit is around Mexico. There are two burning issues there that need addressed, the border being probably the most popular of the two, but nearshoring being another,” he said

The big question is how Trump will leverage tariffs against Mexico in his pursuit to solve those issues.

In the trade conflict between the U.S. and China, the most affected U.S. agriculture product was soybeans.

It’s a different situation with Mexico, which imports more than a quarter of U.S. corn exports. Mexico is also a major buyer of U.S. pork products, milk powders and cheese and is far and away the U.S.’ biggest trade partner, he said.

“So as we look at Mexico … it does cause a little bit of heartburn,” he said.

Foreign labor

But the other thing specific to dairy and all of agriculture is farm labor and what this means on the subject of immigration, he said.

U.S agriculture has to be vocal about the need for immigration and farm labor in a meaningful way, not just seasonally but yearlong and something that structurally changes to accommodate the need, he said

Tariffs are going to come, but the dairy industry needs to look at tariffs as part of the broader economic and strategic policy of the incoming administration, said Marin Bozic, an agricultural economist with the University of Minnesota.

In Trump’s first term, dairy farmers were able get the Dairy Margin Coverage program up to $9.50 per hundredweight and the removal of subsidy limits for livestock insurance products, he said.

Full compensation

“So even if tariffs hurt agriculture directly, I fully expect the compensating measures will more than suffice to … supplement the income that we lose on the market,” he said.

He also expects other government programs will kick in to modify or negate the impact of tariffs.

Some academic research done at the University of Illinois suggests that compensation for agricultural tariffs in Trump’s first term was higher than the negative impact of tariffs themselves, he said.