TRADE UPDATE

Food & Agriculture
July 29, 2025

Prepared by DTB AgriTrade

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HIGHLIGHTS

  • Preliminary Trade Deals:
    • The U.S. recently reached preliminary agreements with the EU, Japan, the Philippines, and Indonesia, indicating a push for new trade frameworks and tariff adjustments ahead of the Aug. 1 country-specific tariff deadline. More details about the agreements are pending, but U.S. tariffs will fall between 15-19% for each of these countries.
  • USDA Reorganization Announcement:
    • The Department of Agriculture announced a significant reorganization plan, including the closure of its South Building and relocation of staff to regional hubs to bring the agency closer to its core constituency.
  • Market Access:
    • Australia lifted certain import restrictions on U.S. beef on July 24.
    • China suspended tariff exclusions for U.S. agricultural imports, potentially leading to significant tariff increases.

“From the cornfields of the United States to the coffee plantations of Colombia, from Argentina’s cattle ranches to the orchards of Chile, our hemisphere has the ability to feed itself and the world.”

—Ambassador Kip Tom, Vice Chair of Rural Policy at the America First Policy Institute, speaking at the Inter-American Institute for Cooperation on Agriculture (IICA) headquarters in Costa Rica.

Preliminary Trade Deals

US Reaches Trade Deal with the European Union

  • On July 27, the U.S. and the EU agreed to a deal, with President Donald Trump reading through some of the provisions at a press conference in Turnberry, Scotland. Imports from the EU will be subject to a 15% tariff, which European Commission President Ursula von der Leyen indicated is a ceiling, stating these would not be 15% stacked on top of existing tariff rates and would apply across
    “most” sectors.
  • Trump touted zero duties for U.S. goods exports to the EU, but von der Leyen said afterward at a press conference that tariffs on at least some agricultural products could not be lowered, though there would be a “zero-for-zero” list of strategic goods that could include some agricultural products.
  • This deal followed a letter from Trump threatening 30% tariffs and EU member state approval of a retaliatory package that would impact €93 billion ($109 billion) worth of U.S. exports (including approximately €6 billion worth of agriculture and food products).

US Reaches Trade Deal with Japan

  • Trump announced that Japan agreed to a 15% tariff rate on all Japanese imports (down from a 25% tariff on all Japanese goods scheduled to hit Aug. 1) and a $550 billion investment package, though details are not publicly available and public comments suggest some may still need to be worked out. 
  • Japan “will immediately increase imports of U.S. rice by 75%, with a major expansion of import quotas” and “will purchase $8 billion in U.S. goods, including corn, soybeans, fertilizer, bioethanol, and sustainable aviation fuel,” among other commitments, according to the White House fact sheet. However, details of how these commitments will be met are also unavailable.

US Reaches Trade Deal with the Philippines

  • Philippines President Fernando Marcos, Jr., visited the White House July 22-24. He and Trump agreed on a framework for an apparently similar deal to the one Indonesia reached last week.
    • While details of the deal have yet to be released, it will reportedly include 19% tariffs on goods the United States imports from the Philippines, a slight reduction from the 20% scheduled to take effect on Aug. 1.
    • Trump indicated U.S. goods will not be subject to tariffs, though the scope of duty-free goods remains unclear; Marcos said those details would need to be worked out.

US Releases Terms of Trade Deal with Indonesia

  • The U.S. and Indonesia released a joint statement on July 22 outlining a framework for their Reciprocal Trade Agreement.
    • The deal, announced on July 15, includes tariff reductions from Indonesia, which will eliminate 99% of tariff barriers and the United States will only increase its “reciprocal” tariffs to 19% (above the current 10% but below the threatened 32%).
    • The parties also intend to address certain non-tariff barriers, such as import licensing and plant registration requirements, while ensuring transparency and fairness on geographical indications.
    • While there are no explicit purchase requirements, the parties “take note” of upcoming commercial deals to purchase U.S. agricultural products, including soybeans, soybean meal, wheat, and cotton, with an estimated total value of $4.5 billion.

USDA Reorganization Announcement

  • On July 24, Secretary of Agriculture Brooke Rollins announced a reorganization plan for USDA staff, outlined in a memorandum. The plan will close the USDA South Building and relocate most of the Washington, DC, staff – 2,600 USDA employees – to five regional hubs in Raleigh, North Carolina; Kansas City, Missouri; Indianapolis, Indiana; Fort Collins, Colorado; and Salt Lake City, Utah.
  • Rollins said the move will bring the agency closer to its “core constituency.” The reorganization has four pillars: ensure the size of USDA’s workforce aligns with available financial resources and agricultural priorities, bring USDA closer to its customers, eliminate management layers and bureaucracy,” and “consolidate redundant support functions.”
    • The move is part of a larger effort to reduce government spending and shrink the workforce. USDA’s press release notes that much of the workforce reduction has already been achieved through voluntary retirements and the Deferred Retirement Program (DRP),” but past relocation efforts suggest that attrition may be high for positions moved out of the DC region.
  • The Foreign Agricultural Service and the U.S. Codex Office are both currently housed in the USDA South Building, which will be closed as part of this reorganization. These agencies play a vital role in trade negotiations and international regulatory policy affecting agricultural trade. USDA has not yet indicated where these or other agencies will relocate following the closure of the South Building.
  • The Senate Agriculture Committee has scheduled a hearing to review the reorganization proposal for Wednesday, July 30.

Market Access

US BEEF ACCESS IN AUSTRALIA

  • Australia agreed to allow expanded access for U.S. beef following the completion of a review by Australian authorities.
  • In 2003, Australia began restricting imports of U.S. beef due to cases of bovine spongiform encephalopathy, commonly known as “mad cow disease.” While many trading partners have reopened to U.S. beef exports, Australia held out on granting full access due to concerns about traceability in the United States, though many in the industry believed the restrictions were politically motivated.
  • Rollins and U.S. Trade Representative Jamieson Greer celebrated the announcement, with Greer crediting President Trump’s “decisive action” and Rollins calling this “yet another example of the kind of market access the President negotiates.”

CHINA SUSPENDS TARIFF EXCLUSIONS

  • USDA published a trade alert from its Beijing office noting that applications for tariff exclusions for U.S. agricultural imports would no longer be accepted after August 1.
  • According to the report, most U.S. agricultural products are affected, including grains, oilseeds, meat, pulses, tree nuts, alcohol, leather/hide, and fruit.
  • Tariff rates will vary, but could increase significantly without the exclusions. USDA provides the projected tariff rates by code in an attached spreadsheet.
  • The chart below from the USDA Economic Research Service shows the value of the tariff exemptions to U.S. agricultural products following the 2018-19 trade war and the implementation of the Phase One agreement.