Amid ongoing trade negotiations, the immediate concern for the U.S. potato industry is any retaliatory tariffs countries might place on U.S. exports, says National Potato Council CEO Kam Quarles.
Quarles said the U.S. potato industry exports about 20% of potatoes grown in the country, whether that be chips, processed or fresh — and these exports are critical for potato growers. If growers were to face steep tariffs on exports, that could significantly impact both prices and growers’ bottom line.
“The other thing that gets missed is beyond just the agriculture side of things. The harvesting equipment, the planting equipment, the steel and aluminum that goes into a number of the facilities that growers have to either maintain or build new, all of those things can be impacted by tariffs, and the technology that we use to make sure that potatoes are planted, harvested and stored at uniform temperature so they have the absolute best quality — all of those things dependent on international trade,” he said.
Quarles estimates tariffs would significantly affect the 34,000 jobs in the U.S. potato industry and its $5 billion contribution to the U.S. economy. He said the Trump administration must look at conducting trade negotiations with precision.
“If we blunder into these types of circumstances, there can be horrible, horrible negative outcomes for U.S. family farms,” he said.
While Quarles said those in Washington, D.C., have been trying to understand the impact of the tariffs and what that means to each individual industry, he said he’s optimistic that some good can come out of the trade negotiations.
“[For] a lot of those real-world folks, the natural reaction when they see this kind of chaotic stuff is just to is just to pull back,” he said. “It’s difficult to make investment decisions. It’s difficult to really predict what the end of the year is going to look like when the beginning of the year is so all over the place. We’re hoping to get to a little bit more stability.”
Exports to Japan, Quarles said, could benefit from tariffs and subsequent trade negotiations.
“[Japan has] really refused to move forward on a market petition that, in our opinion, can provide tremendous benefits to the U.S. growers as well as Japanese consumers — probably $150 million a year if Japan will simply adhere to its responsibilities and allow us fresh potato access,” he said. “All of this politics around tariffs may provide the leverage to be able to finally pry that door open that has been so slammed shut by a lot of the protectionism that’s been occurring in in Japan.”
Quarles said there may be an opportunity for processed product, too, in Vietnam, Thailand, Taiwan and the Philippines.
One thing Quarles said he is following is the debate about the revenue for tariffs and how those tariffs will factor into the government spending reductions.
“If they need that money to pay for tax cuts or other things, that simply means that those tariffs have to go on and they cannot come off because you just you flat out need the revenue,” he said. “What their projections around this revenue looks like and the importance of that math and building that big bill — that will tell us a lot about whether or not this is this this is kind of a thing negotiating tactic creating leverage driving people to the table ultimately to reduce friction in global markets or whether or not we’re just going to have a whole bunch of new elevated tariffs that are going to change the playing field.”
