Kansas at Risk: Tariffs Threaten Agriculture and Jobs

Originally posted to The Kansas Policy Institute.

The return of tariffs under the Trump administration spells trouble for Kansas, especially its agricultural sector. 

Past federal tariffs and retaliatory tariffs by other countries in 2018 and 2019 led to nearly $1 billion in lost trade annually for Kansas farmers, particularly those exporting soybeans, sorghum, and pork. In response, the federal government issued billions of taxpayer dollars in subsidies, but bailouts are no substitute for free markets. 

This time around, tariffs are in place for many goods imported from China at an additional 10% above what’s already imposed and for Canada and Mexico at a 25% rate. These countries have already announced retaliatory tariffs that contribute to the heated trade war at the time of this writing.

The High Cost of Tariffs
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• Higher Prices, Job Losses—Tariffs raise consumer costs, reduce investment, and disrupt supply chains.
• Slower Economy – Economists warn that tariffs could push the U.S. into recession within a year.
• Bailouts Are Unsustainable—Although previous federal aid subsidies soared to $20 billion in 2020, they primarily helped large farms while adding to the national debt.

Kansas Leaders Must Act

Instead of waiting for Washington, Kansas policymakers should:

• Expand Export Markets – Diversify trade relationships to reduce reliance on a few countries.
• Boost Value-Added Agriculture – Encourage processing industries that add value to raw commodities and create jobs.
• Reduce business costs – Spend, tax, and regulate less so businesses can better manage the uncertainty and increased costs of tariffs. 
• Defend Free Trade – Work with federal leaders to remove trade barriers that hurt Kansas businesses, pushing Congress to take back its power to tax from the Executive Branch.

Conclusion

Tariffs weaken Kansas’s, and everyone else’s,  economy, leading to higher costs, job losses, and uncertainty. Bailouts don’t fix the problem—free trade does. State leaders must develop pro-growth policies to protect Kansas from another costly trade war.