US farmers face higher costs, fewer markets from tariffs, farm groups warn

By Tom Polansek

CHICAGO (Reuters) - U.S. President Donald Trump's new tariffs on goods from Canada, Mexico and China threaten to hurt the $191 billion American agricultural export sector and raise costs for farmers struggling with low crop prices, farm groups warned on Tuesday.

Trump imposed 25% duties on imports from Mexico and Canada and doubled duties on Chinese goods to 20%, sparking trade wars with the biggest buyers of U.S. farm products.

Canada and China targeted American products including wheat and poultry with retaliatory levies, while farm groups said U.S. tariffs on imports from Canada would raise fertilizer costs. About 85% of U.S. imports of potash fertilizer come from Canada, according to industry data.

Higher costs and lower exports would hit farmers as many are bracing to lose money growing corn and soybeans, the nation's biggest commodity crops.

"For the third straight year, farmers are losing money on almost every major crop planted," said Zippy Duvall, president of the American Farm Bureau Federation.

"Adding even more costs and reducing markets for American agricultural goods could create an economic burden some farmers may not be able to bear," Duvall added.

U.S. Agriculture Secretary Brooke Rollins said she was in communication with Trump about the economic repercussions to farmers.

"His message, frankly, to the ag community is 'trust me,'" Rollins told reporters at the National Association of Counties conference.

China, the world's biggest soybean importer, retaliated against U.S. tariffs by hiking import levies covering $21 billion worth of American agricultural and food products. Canada imposed retaliatory duties on C$30 billion ($20.84 billion) worth of U.S. imports.

Worries about tariffs and retaliation prompted some Canadian grocers to cancel orders from American produce growers and shift to suppliers in other countries in the past month, U.S. farmers' group Western Growers said.

For red meat, Canada, Mexico and China accounted for $8.4 billion in U.S. exports last year, according to the U.S. Meat Export Federation.

"Tariff wars are only serving to harm those who rely on international trade to support their livelihoods," said Greg Tyler, CEO of the USA Poultry & Egg Export Council.

($1 = 1.4394 Canadian dollars)

(Reporting by Tom Polansek in Chicago. Additional reporting by Leah Douglas in Washington and Karl Plume in Chicago; Editing by Bill Berkrot)