Exporters Should Prepare for Retaliation If Trump Follows Through on Tariffs, Advisers Say
American exporters, especially in the agricultural industry, should expect to face retaliatory duties when selling to a range of U.S. trading partners if President-elect Donald Trump follows through on his promise to sharply increase tariffs when he takes office next year (see 2408140058), lawyers and advisers said this week.
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Other countries have so far been “very clear that if we hit them with tariffs, they will retaliate,” said Ron Kind, a former Democratic House member from Wisconsin and now a trade adviser with Arnold & Porter. “They're not just going to sit back and take it.”
Speaking during a Nov. 12 event hosted by the firm, Kind specifically said China “figured out” during the first Trump administration how to pivot away from U.S. agricultural goods, and could instead begin sourcing those goods from South America and Central America or other countries in the Asia Pacific region, such as Australia and New Zealand.
Kind, who retired from Congress in 2023, said he was “always amazed” that farmers in his home state of Wisconsin accepted Trump’s rationale for imposing the tariffs, “knowing full well” that they were causing China to impose retaliatory duties on U.S. exporters. He noted that whatever tariff revenue the U.S. raised from those duties just went “right back into subsidies to these very farmers that were being adversely impacted by this new tariff regime.”
Lynn Fischer Fox, an Arnold & Porter lawyer and former senior International Trade Administration official, said U.S. trading partners may be better prepared during the second administration to counter any new tariffs. She said countries learned “where to retaliate against the U.S.” during the first Trump term, when the U.S. increased duties on China, the EU, Mexico, Canada and others.
She said those countries could retaliate against U.S. agricultural exporters of soybeans, dairy products, oranges and other foods, which would be “very painful” for American farmers. The soybean industry could be hit especially hard, Fox said, considering it exports about 70% of the soybeans it grows.
“That's a real disruption,” Fox said.
And countries that feel they need to target other U.S. sectors beyond the agricultural industry could begin imposing trade restrictions on U.S. service providers or companies operating in the digital trade sphere, Fox said.
Kind also said he’s concerned a new set of Trump-imposed duties could set off a “tariff war” that affects a broader range of U.S. exporters than just those in the agriculture industry.
“We're going to be forcing countries to make a decision about whether it's in their best long term interest to stay aligned with the United States when it comes to trade or if they have greater capacity to pivot away from us -- whether it's to China or to other countries -- for their domestic needs,” he said. “And that's a real question mark that hopefully the Trump administration will take seriously before they start imposing tariffs that will be hard to withdraw in the future.”