Making sense of Trump administration policies

Yes, there are significant impacts for ag. But turbulence and uncertainty reign for now

Trying to understand the whirlwind of changes coming out of the Trump administration has not been easy.

The scope and speed of new executive actions have left most of us wondering how the proposed changes will affect our lives and businesses. Some announced tariffs have already been rolled back. More changes are likely to take place.

“There’s a lot of turbulence and uncertainty right now,” said Brian Kuehl, a principal with Pinion who leads the company’s government and public affairs service area. “We just have to wait and see because things can change pretty rapidly.”

In the meantime, he and his team are closely watching areas that carry significant consequences for United States agriculture:

Trade and tariffs

These are among “the hottest topics affecting ag today,” Kuehl said. He points to where tariff issues stood in mid-March: the U.S. had imposed 20% tariffs on China—on top of previous tariffs, as well as 25% tariffs on goods coming in from Mexico and Canada. Tariff retaliations from foreign countries have followed along with threats to add more tariffs, Kuehl notes. China has added 15% tariffs on U.S. corn, wheat and poultry shipments, and 10% on soybeans. On top of that, “Trump has threatened new tariffs that could affect agriculture,” Kuehl adds.

Funding freezes, staff layoffs and cuts to international aid

“There have been a lot of concerns about producer contracts and staff layoffs within USDA’s Natural Resources Conservation Service and Farm Service Agency,” Kuehl said.

Initially, the Department of Government Efficiency had recommended cutting all “probationary” employees at USDA. That could have totaled 12,000 employees. But, on March 11, USDA announced the Merit Systems Protection Board had issued a 45-day stay on the termination of USDA probationary employees. By March 12, USDA said, it would place all terminated probationary employees in pay status and provide each with back pay. USDA’s statement further said it would work quickly to develop a phased plan for return-to-duty.

That announcement followed earlier assurances from Brooke Rollins, secretary of agriculture, who told an audience at the Commodity Classic in early March there would be sufficient in-office staff to serve farmers and ranchers. She also said funds had been cleared for the Environmental Quality Incentives Program, the Conservation Stewardship Program and the Agricultural Conservation Easement Program. Rollins also announced USDA’s plan to distribute the economic and disaster aid passed by Congress late last year.

But it’s not likely any more funds will be released under the Inflation Reduction Act. In January, Trump declared a “national energy emergency” and directed federal agencies to expedite permitting of new energy projects. Notably, new wind and solar projects are not included in the list.

“Gone are the days when the USDA will be advancing the Green New Deal,” Rollins told the Commodity Classic crowd. “Gone are the days that the USDA will be advancing diversity, equity and inclusion. Instead, we will only advance deals that put our farmers and our ranchers and our ag community first.”

Another big impact on U.S. agriculture is the closing of USAID, the U.S. agency which administered foreign aid and development assistance in more than 100 countries. In the past couple of years, Kuehl says, USAID had annually purchased $2 billion of ag commodities. Those included wheat, rice and peanuts.

“Trump is going to try his best to make sure farmers aren’t angry with him,” Kuehl said. “He loves tariffs, but he knows those are hurting farmers. So, he’s going to try to square the circle, probably with more farm payments to farmers, like the Market Facilitation Program. But with bigger deficits, program reductions and tax cuts, that will be challenging.”

· The farm bill. “We are more bearish on the farm bill at this point,” Kuehl said. That stems from Congress’s partisan division that will surely intensify over the House budget’s call for cuts of $230 billion from USDA. Republicans are expected to target the Supplemental Nutrition Assistance Program portion of the farm bill for much of that reduction. Resistance from Congressional Democrats over the SNAP cuts will likely jeopardize the farm bill’s passage. Kuehl believes if the farm bill passes, it will happen in September. “But it could very well be extended for another year,” he adds.

· Immigration. Threats of mass deportations of illegal immigrants haven’t materialized as yet. Pinion and the ag industry are keeping a close watch on this issue that could profoundly impact agricultural labor.

Resources

What can you do to better understand Trump’s new policies? Educate yourself in this evolving political environment. It can be hard to get good information, but here are some credible resources:

· www.pinionglobal.com – “We try to keep people and our clients informed of what’s happening,” Kuehl said. Pinion also offers a political intelligence subscription. In addition to a monthly debrief newsletter on political topics, the subscription includes a monthly group meeting led by Kuehl to cover new developments and answer questions.

· www.USDA.gov – You can get announcements and more, straight from the horse’s mouth.

· Communicate with your major commodity groups, such as National Corn Growers Association, National Cattlemen’s Beef Association, Kansas Livestock Association and American Soybean Association. They’re all watching closely and trying to make sense of the new administration’s executive actions—just like everyone else.

Editor’s note: Maxson Irsik, a certified public accountant, advises owners of professionally managed agribusinesses and family-owned ranches on ways to achieve their goals. Whether an owner’s goal is to expand and grow the business, discover and leverage core competencies, or protect the current owners’ legacy through careful structuring and estate planning, Irsik applies his experience working on and running his own family’s farm to find innovative ways to make it a reality. Contact him at max.irsik@pinionglobal.com.