April 23, 2025 - By Matthew Viohl - It has been a whirlwind in the nation’s capital as the new administration moves forward on enacting its trade priorities. An April 2 announcement of steep global tariffs was followed a week later by a 90-day pause, except for China and a global baseline tariff.
But what are these tariffs exactly—and what could these measures mean for agriculture in California? As with many things in life, the answer is often much more complicated than the question.
At the most basic level, tariffs are an additional charge on imported goods. They can be referred to as import taxes or duties, although the two are technically a bit different. Tariffs are typically percentage-based and make no distinction between specific items, while duties tend to be more targeted and can be based on measures such as weight or quantity.
Let’s focus on tariffs, as that’s what is mostly making the evening news these days.
While a 90-day pause is indeed in effect for most countries, the U.S. still adopted a new 10% global tariff. The pause is merely for countries that were set to receive an even higher rate.
If you’re planning to buy machinery from Germany that cost $10,000 before the tariffs, the easy napkin math is that it would now likely cost an extra $1,000 to purchase following the implementation of the new tariffs. Whether buying direct or through a retailer or wholesaler, those costs are typically passed along to the consumer.
This is why tariffs are often referred to as a tax. American businesses that import goods are having to pay the new tariffs up front—usually not the country that ships them in. And if you import something that now costs 10% more, the only way to make up for lost profits is to sell that item domestically at a higher cost.
Tariffs used in this wide-ranging manner are seen as a protectionist action that can lead to a boost in domestic production. As the costs of importing goods go up, the hope is that businesses and consumers will instead turn to American-made and -grown options that are now less expensive compared to now costlier imports.
What does all this actually mean for California agriculture? As the nation’s leading agricultural exporting state—with more than $24 billion in agricultural products sent to overseas markets in 2023—trade is a critical component of what keeps our industry viable.
It varies significantly by commodity. With more than 400 different types grown and produced in our state, there are some commodities that rely heavily on international markets, while others can get by on local and domestic options. Tree nuts, dairy products, wine and many fresh fruits and vegetables head to markets overseas, especially to our northern and southern neighbors.
Some sectors, such as citrus, certain table grapes and tomatoes, have struggled with unfair trade practices from other countries for years. It is already difficult for many California producers to compete with the significantly lower production costs found in other countries. Add on illegal dumping during our peak harvest periods? You will certainly find areas where strategic trade measures could go a long way in protecting American agriculture.
In a vacuum, tariffs would give domestic producers the upper hand in selling their products here. However, the main sticking point is reciprocal tariffs. Other countries seldom sit by idly while other nations increase tariffs against them. Most tend to implement their own counter tariffs or other trade measures to protect their interests.
When two countries or more get into varying countermeasures, you typically end up with a trade war. It is difficult to say if we are in one right now, but it might be safe to say we are with China, as both countries have adopted tariff rates in excess of 120%.
For the rest of the world though, we now sit in a fast-moving period of transition. The administration is currently working closely with several countries that have approached the U.S. to negotiate new trade deals with the hopes of reducing our trade deficits.
The threats of tariffs do indeed serve as a strong tool when it comes to negotiating on trade. Whether one supports the administration’s approach or not, it has undoubtedly led to significant shifts in behavior from countries around the world.
It remains to be seen what the next steps will look like. Three months is a blink of the eye in the trade world, so it seems likely that an additional delay might be necessary to fine tune these purported trade deals. Policymakers, businesses and consumers are all watching closely, as the next steps will likely shape global trade for years to come.
Matthew Viohl is a director of policy advocacy for the California Farm Bureau. He may be contacted at mviohl@cfbf.com.
The California Farm Bureau Federation works to protect family farms and ranches on behalf of nearly 32,000 members statewide and as part of a nationwide network of more than 5.5 million Farm Bureau members.
Source: Reprinted with permission CFBF
