Overall, results from our reader survey (polls are now closed!) are mixed (33% predict a positive impact on the food industry, 46% predict a negative impact), with many respondents anticipating a more business-friendly environment, but other worried that Trump’s protectionist stance could result in trade barriers.
47% felt Trump in the Oval Office would be bad news for exports vs 30% who felt that he would spell good news for exports.
TRADE: ‘Trump is all business. I believe he will negotiate better trade deals’
When it comes to trade, Trump opposes the TPP (the Trans Pacific Partnership), a yet-to-be-ratified trade agreement between 12 Pacific Rim countries including Japan and Australia (but excluding China), which US food trade associations, including the GMA, as well as high-profile names such as Cargill and ADM, have broadly supported.
Trump has also said he would renegotiate NAFTA (a free trade deal between the US, Canada, and Mexico), which might mean that food manufacturers making products in Mexico or Canada and importing them to the US could face some form of tariff, although Trump has not volunteered specifics.
Meanwhile, US food companies trading with or in China (from Mondelez, Tyson, and Mars to Mead Johnson and PepsiCo) could also be feeling anxious this week – depending on their political persuasions – given Trump’s inflammatory rhetoric about dumping and currency manipulation.
The Republican platform (p17) opposes rules requiring that calorie information be listed on menus in chain restaurants and similar retail food establishments and vending machines, set to come into effect on May 5, 2017 (click HERE): “The intrusive and expensive federal mandates on food options and menu labeling should be ended as soon as possible by a Republican Congress.”
‘If we pull out of trade agreements it will trigger retaliations’
One survey respondent noted: “I fear a major impact due to [Trump’s] anti-trade policies and actions. The US relies on exports for growth and profit opportunities, particularly in the Pacific region. If we pull out of trade agreements or we do not adopt those that have been negotiated, yet not ratified, it will trigger retaliations that will negatively impact those disenfranchised who strongly supported Trump in the election.”
A second commentator said: “A large part of our supply chain is in Mexico and South America. The proposed tariffs would lead to lead to hikes in commodity prices. There will likely be an increase in labor costs in agriculture. These are costs that will likely offset any gains from tax cuts. If the current economic plans are pursued, tariffs that the US imposes and retaliatory tariffs are going to decrease demand outside the country and decrease exports.”
Another feared that a more isolationist approach would roll back progress made on standards: “[A Trump presidency] could reverse trends towards globalization, harmonization of standards and impact supply chain integrity.”
But other respondents felt Trump would be good for trade. According to one reader: “Trump is all business. I believe he will negotiate better trade deals with overseas buyers of our goods and services. This will provide a huge boost for our economy as a whole and the food industry in particular.”
"Initially, we see trade agreements, agricultural policy and labor as key areas where there are potential policy-change implications for agriculture over the long term.
"As the number one global agricultural exporter, the US food & agriculture sector is one of the main drivers of global agriculture and trade. In 2016, US agricultural exports reached almost $127bn, followed by Brazil and then China. Current US agricultural trade operates under a surplus of around $20bn. The US exports different commodities that complement the rest of the world’s food supply. To illustrate, the US is the largest producer and exporter of corn, and US soybean exports make up 40% of global soybean exports (46% of US soybean production). Thus, any change to US agricultural trade agreements will not only affect global prices and trade dynamics but also US farmer margins.
"While it is too early to know for sure, it is questionable whether US agricultural trade agreements, particularly NAFTA, will stop or go through major changes. This is because the US, Mexico and Canada are in many ways an integrated agricultural market. Currently, US agricultural exports to Mexico and Canada account for around 30% of total US agricultural exports. At the same time, agricultural exports from Mexico and Canada to the region account for 80% and 55% of total exports, respectively. For example, Mexican pork imported from the US represents around 12% of total US pork production. Mexican poultry imports also represent around 30% of total US poultry exports. Finally, the US exported 3.7m tons of milk products (expressed as liquid milk equivalent) to Mexico in 2015—Mexico being by far the biggest export destination for the US.
"While, these numbers represent significant trade values, they also illustrate the integrated nature of the North American animal protein supply chain. This also includes the beef complex, where Mexico and Canada are the suppliers to US feed lots and packing plants, which allows year-round processing. Mexican corn imports represent 23% of total US corn exports and are an important part of the animal-feeding supply chain. Many other sectors are integrated in similar ways. Consequently, changes to agreements such as NAFTA would have significant implications both for Mexican animal feeders, Mexican consumers and US farming profit margins." Rabobank, 11.154.2016
It’s anyone’s guess, but the New York Times has its money on one of the following:
- Sam Brownback Kansas governor
- Chuck Conner CEO of the National Council of Farmer Cooperatives
- Sid Miller Texas agricultural commissioner
- Sonny Perdue Former Georgia governor
FARMING: Trump will mean ‘more domestic foods but at higher prices’
As for farming, our readers were split, with 40% claiming that he is good news for farmers and 38% arguing he is bad news.
One reader predicted that Trump’s move to oust illegal immigrants – many of whom are agricultural laborers - coupled with potential trade barriers should he renegotiate NAFTA, could lead to “more domestic foods but at higher prices,” while another said that, “If cross-border trade were to be limited, this will negatively impact farmers and food producers due to more costly imports coupled with likely trade barrier retaliation, impacting exports.”
Where does Trump stand on the Supplemental Nutritional Assistance Program (SNAP), which is funded via the Farm Bill, and offers nutrition assistance to more than 40 million low-income individuals and families?
Donald Trump’s 2016 Republican platform calls for breaking the SNAP program away from the Farm Bill (p25). However, on September 13, Sam Clovis, a senior adviser in the Trump campaign, said that Trump would not seek to remove SNAP benefits from the 2018 Farm Bill (according to Modern Farmer), so it’s not clear what might happen next.
ENVIRONMENT: ‘The fact that he believes climate change is a hoax created by the Chinese government says everything that you need to know…’
Given Trump’s plans to curtail the powers of the Environmental Protection Agency (EPA), coupled with comments made on the campaign trail about the FDA and the ‘food police,’ many FoodNavigator-USA readers believe that a Trump administration spells bad news for the environment (68%), food safety (49%) and nutrition & health (44%) – although large numbers ticked ‘no impact’ or ‘don’t know’ on the latter two questions.
As one respondent told us: “It’s hard to know anything given his campaign's scarcity of specifics… Food and ag policy is so far down the agenda for Trump that he has scarcely mentioned it. Therefore, anything submitted on this survey is pure conjecture.”
Commenting on Trump’s stated plan to back out of the Paris Climate Change agreement that seeks to cut global CO2 emissions, one respondent noted: “The fact that he believes that climate change is a hoax created by the Chinese government says everything that you need to know about this idiot.”
The Republican platform (p17) opposes GMO labeling – an initiative that has only just hit the statute books (click HERE), although Trump has not talked about repealing it on the campaign trail: “We oppose the mandatory labeling of genetically modified food, which has proven to be safe, healthy, and a literal life-saver for millions in the developing world.”
REGULATIONS: ‘Governmental ‘red tape’ will be significantly reduced’
However, many welcomed the news that Trump’s campaign has said it will issue a moratorium on new agency regulations, with one claiming: “Trump most positive effect, potentially, is regulatory reform. All manufacturers are drowning under a raging sea of some 800 new major regulations over the past eight years. Food safety agencies need to be reorganized and consolidated; much time and money is wasted under the current system.”
Another added: “The regulatory processes will be more streamlined and clearly defined. Governmental ‘red tape’ will be significantly reduced. The entire business community, including food and beverage industries, will greatly benefit from Trump.”
Check out our full survey results below: