Tariffs, agrochemicals and China: What Trump’s presidency means for Aussie farmers

American president-elect Donald Trump will be ushering in a new era of international relations, and it will be a waiting game to see what this means for Australian farmers. Episode Three market analyst Matt Dalgleish said one of the marked differences people can expect to see from Trump’s policies compared to his 2017 leadership is to do with who he surrounds himself with. In 2017, Mr Trump had the assistance of well-seasoned and experienced advisers to help shape his policies. “But through the period of the first administration, he kind of worked through a few of those advisers. They didn’t see eye-to-eye,” Mr Dalgleish said. “A lot of those advisers aren’t there now, and it seems as though he’s filling his new cohort of key advisers with people not necessarily from the political establishment or people who’ve been involved in those roles.” Mr Dalgleish said this could make for “incredibly unpredictable behaviours” from the Trump administration moving forward. WEAKENING DOLLAR The most immediate effect Australian agriculture may feel is to do with the Trump administration’s impact on currency, according to RaboResearch general manager Stefan Vogel. “With the strengthening US dollar that we have already initially seen as a result of the Trump victory, the resultant softening in the Australian dollar is a positive for Australian agricultural exporters,” he said. “Though conversely, it serves to make farm inputs – including fertiliser, agrochemicals, fuel and equipment – which are largely imported, more costly to purchase.” Mr Dalgleish also said a weaker Australian dollar is beneficial, but only as long as it doesn’t get “too low” and cause imported inflation on imports like fuel, machinery and fertiliser. TARRIFS Mr Trump has promised to introduce across-the-board tariffs of 10 to 20 per cent, which has raised concerns for Australia, an export-heavy nation. However, when Mr Trump took the presidency in 2017, Australia was exempt from the tariffs imposed because of the two country’s Free Trade Agreement. Mr Dalgleish also said it would be in the new president’s best interest to avoid tariffs with Australia, especially when it came to imports such as beef. Australia has ramped up its beef imports to the United States, from an average of 11,000 tonnes worth $100 million a month in 2022 to nearly 40,000 tonnes worth $290 million in August of this year. “The American beef sector is in their fifth year of liquidation, and you’ve got a very low herd level, the lowest herd we’ve seen 70 years’ time,” he said. “(America) is quite reliant on imported red meat and Australia has been increasing our market share . . . Trump’s also spoken about trying to push lower consumer costs for the American consumers, and obviously they are big meat eaters.” While Australian agriculture might not be impacted by direct tariffs to Australia, a bigger problem could come from the tariffs imposed on China, a country that processes a lot of our agricultural products — including wool. Mr Dalgleish said a tariff on China could weaken the Asian country’s economy and damage consumer confidence, leading to less demand of Australian products. “So, it could be continued soft demand for raw wool, continued soft demand or under average demand for red meat we send to China, or a drop in demand for iron ore if they have significant disruption to their economy,” he said. “There could be significant secondary impact (for Australia) there, across several commodities.” AGROCHEMICAL USAGE Robert Kennedy Jr, who is strongly against the use of agrochemicals, has previously said Mr Trump had promised him a leading position in the United States Department of Agriculture. In a post made to X, Mr Kennedy said when he was inside of the USDA, he would give farmers “an off-ramp from the current system that destroys soil, makes people sick, and harms family farms”. Mr Dalgleish said these policies were “almost identical” to the Australian Greens party when it came to agriculture. “From the US perspective, it is a concerning development if he was to be able to push as far as he wants to push,” Mr Dalgleish said. “When you’ve got the whole of your agriculture sector all using organic only . . . that can mean they have less for export or less for domestic consumption in terms of product. “You only need to look at what happened in Sri Lanka when they tried to impose a complete organic methodology across their production system, and it caused a whole manner of problems that nearly collapsed the economy.” Mr Dalgleish said while a dramatic drop in American grain production could mean a rise in demand for Australian grain, a potential agrochemicals ban still spelt bad news for Australia’s agriculture. “Even if you get some potential trade benefits or market access benefits, I think the longer term damage the policy can do is actually quite concerning for a country like Australia, whose reliant on an early and robust global economy,” he said.