The U.S. International Trade Commission lifted tariffs on nitrogen fertilizers imported from Russia and Trinidad and Tobago.
The ruling is a major win for hard-pressed farmers, who have been squeezed by skyrocketing inflation in fertilizer costs due not only to general inflation, but to the war in Ukraine, because Ukraine and Russia are both major suppliers of fertilizer on the world market. The decision is effective immediately.
The tariffs came at the behest of Mosaic, which convinced the ITC to approve the tariffs by arguing that industry losses in 2017 through 2019 were due to unfair foreign competition. The ITC placed Moroccan phosphate fertilizer under a punitive 20% tariff to last five years.
Following Mosaic’s lead, CF Industries filed a petition with the ITC to place tariffs on urea ammonium nitrate solutions, used in liquid fertilizers, imported from Russia and Trinidad and Tobago.
Growers argued the tariffs were unnecessary, since Mosaic already controlled three-fourths of the United States domestic market and claimed the government handed Mosaic a virtual monopoly. Writing in AgWeb, Jon Doggett, CEO of the National Corn Growers Association, wrote in November, “While other corporations and firms are attracting public scrutiny for how their practices impact Americans, fertilizer executives are making out like bandits at the expense of the people who feed and fuel America. Let’s just refer to them as the Fertilizer Oligopoly.”
The latest ITC action came in response to an appeal filed by Moroccan producer OCP last November. OCP’s attorneys argued that weather conditions and domestic plant closures in 2017-2019, not fertilizer imports, were responsible for the losses of those years. Morocco and Russia are subject to phosphate fertilizer duties that are still in place. OCP North America is the process of appealing those duties and oral arguments were recently completed before the U.S. Court of International Trade.
Five farm groups filed supporting briefs in the case before the ITC, including the NCGA, the Agricultural Retailers Association, the American Soybean Association, the National Cotton Council and the National Sorghum Producers.
“This comes as a welcome relief,” said NCGA President Chris Edgington. “We have been sounding the alarms and telling the ITC commissioners that tariffs will drive up input prices to even more unaffordable levels for farmers and cripple our supply. I am so glad they listened.”
U.S. Rep. Tracey Mann, R-KS, was pleased with the ITC’s ruling and as a member of the House Agriculture Committee he has written three letters and introduced legislation to challenge the tariffs. Mann said the fight was far from over as farmers need additional relief from the high cost of fertilizer.
“Today, the U.S. International Trade Commission rejected imposing final duties on urea ammonium nitrate in its determination that anti-dumping activity surrounding UAN fertilizers in Trinidad and Tobago did not harm the U.S. fertilizer industry,” Mann said in a press release on July 18. This is a step in the right direction for American farmers and agricultural producers who have been laboring under skyrocketing fertilizer prices, with UAN prices at the top of the list.”
A group of U.S. farm-state senators and representatives, including members of important agricultural committees, had released a letter July 14 demanding that President Joe Biden act to ease tariffs on imported Moroccan phosphate fertilizer. The letter was written by Sen. Roger Marshall, R-KS, and Mann, and was signed by six other senators and 23 representatives. Farmers report that fertilizer prices have risen as much as 200% over the past year.
“Our country’s farmers and agricultural producers are making decisions on what to plant today based on fertilizer prices rather than typical market fundamentals,” the letter stated. “Coupled with inflation at the highest it has been in 41 years and a Consumer Price Index for food up 14.6%, the rising cost of fertilizer will increase food insecurity and geopolitical tension domestically and abroad … Unfortunately, during these unprecedented circumstances, your Department of Commerce and U.S. International Trade Commission (ITC) imposed duties on imports of Moroccan phosphate and is in the process of imposing duties on UAN from long-time supplier Trinidad and Tobago. In fact, currently, a supermajority of the global tradable supply of phosphate fertilizers is subject to U.S. duties…The bottom line is that fertilizer is critical to national security and national defense. Its affordability is also critical to wrangling out-of-control inflation. As such, we strongly encourage you to take immediate action to waive duties on fertilizer imports from Morocco and Trinidad and Tobago…”
In March, a bipartisan group of more than 83 U.S. congressmen and congresswomen sent a letter to the ITC requesting the suspension of the fertilizer tariffs.
David Murray can be reached at [email protected].
