Agricultural Chemicals:
Under a new Trump administration, policies on agricultural chemicals may be influenced by key figures such as Robert F. Kennedy Jr., who has expressed a desire for stricter regulation of agricultural chemicals. In early October, in a video Kennedy posted on X (formerly Twitter) that he intends to work with Trump to "ban the worst agricultural chemicals" if placed in a role within the United States Department of Agriculture (USDA). Such regulatory shifts could lead to tighter U.S. standards on chemicals, which may impact U.S. grain production costs and practices.
For Australian grain growers, the primary risk lies in potential alignment between U.S. and EU standards potentially impacting global trade norms which place pressure on Australia to adopt similar standards.
The U.S. Farm Bill:
If Trump returns to office with a Republican majority in the Senate, the long-delayed U.S. Farm Bill is expected to pass, bringing needed stability to U.S. farmers. The current Farm Bill, which expired over a year ago and has an emergency extension until the end of 2024 is a comprehensive legislation that supports food and agriculture policy in the U.S. The Republican Ag Committee Chair Glenn “GT” Thompson has prioritised passing this bill, especially amid rising costs and declining crop prices.
The passage of a new Farm Bill will be welcomed by U.S. farmers who are facing declining prices for many crops and rising costs for fertiliser and other inputs. Nearly 300 members of the National Farmers Union visited lawmakers in September to ask for passage of a new five-year farm bill before the end of 2024.
For Australian grain growers, this could mean intensified competition, particularly if U.S. subsidies enable lower production costs.
Environmental Policies:
Trump’s second term in office may signal a reversal of existing U.S. climate initiatives. Known for his scepticism toward climate change, Trump has previously pulled the U.S. out of the Paris Climate Accords and rolled back over 100 climate-related regulations. A Trump administration would likely deprioritize climate change, emphasizing fossil fuel expansion and deregulation.
This reversal could impact global sustainability efforts, potentially affecting initiatives aimed at promoting sustainable agriculture. While this shift might create opportunities for Australian grain in markets that prioritise sustainable production, it may also undermine global progress on environmental sustainability, placing further pressures on the agricultural sector worldwide.
Trade Protectionism:
Trade protectionism is likely to rise under a second Trump administration. Trump has proposed implementing a 60% tariff on Chinese imports and a 10-20% tariff on all other countries, sparking concerns over global trade stability. The WTO’s Director General, Ngozi Okonjo-Iweala, has cautioned that such tariffs could lead to a “free-for-all” in trade.
The last Trump administration saw significant trade tensions, with tariffs on Chinese and other imports prompting retaliatory measures from major trading partners. If protectionist policies return, U.S. agricultural exports could be constrained, potentially increasing demand for Australian grain in key markets. However, this could also lead to broader trade slowdowns and greater market unpredictability, complicating export planning and price stability for Australian growers.
Conclusion:
The re-election of Donald Trump to the U.S. presidency has varied implications for Australian grain growers. Some U.S. policy shifts could present short-term market opportunities, such as increased demand for Australian grain. If American exports are hampered by protectionism or if U.S. farmers face regulatory changes, however these benefits come with considerable uncertainty and potential challenges. Protectionist trade policies, if reinstated, may lead to increased market volatility, while a rollback on climate initiatives could slow global progress on sustainable farming, increasing environmental pressures that ultimately affect grain production worldwide.
It will be essential to monitor U.S. policies closely to navigate both the risks and opportunities of this complex landscape, ensuring the Australian grain sector remains resilient and competitive.