TRADE UPDATE

Food & Agriculture
August 26, 2025

By Kristy Goodfellow, Vice President of Trade and Industry Affairs, and Ameya Khanapurkar, Project and Policy Coordinator

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HIGHLIGHTS

  • Tariffs and Bilateral Negotiations:
    • The American Soybean Association is expressing grave concerns about increased input costs and loss of export markets in a letter to President Trump and a white paper.
    • The United States and European Union released a joint statement on a framework agreement regarding trade.
    • Prime Minister Mark Carney announced that Canada will match the U.S. tariffs on goods which meet USMCA origin requirements, removing the 25% retaliatory tariffs Canada imposed on several U.S. products in March.
  • Trade Data:
    • The OECD and FAO highlighted a rapid rise in animal-source food consumption and production in lower-middle-income countries in their recently released Agricultural Outlook 2025-2034.
  • Multilateral:
    • A WTO dispute settlement panel concluded that certain aspects of the European Commission’s assessments of Indonesia’s biodiesel subsidies were inconsistent with the WTO Subsidies and Countervailing Measures Agreement.

“Soybean farmers are under extreme financial stress. Prices continue to drop and at the same time our farmers are paying significantly more for inputs and equipment. U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer.”

—Caleb Ragland, American Soybean Association President, in an August 19 letter to President Trump

Tariffs and Bilateral Negotiations

  • The American Soybean Association (ASA) warned President Trump that U.S. soybean farmers cannot survive a prolonged trade dispute with China, especially in addition to the financial stress that farmers already face from higher input and equipment costs.
  • ASA also shared a white paper with the Trump Administration which outlined the impacts of the 2018 trade war on international soybean competition, particularly Brazil’s growing soybean market share replacing that of the United States.
  • The white paper highlights that the 2025 high retaliatory duties have resulted in China not placing any new crop export orders, where Chinese buyers have traditionally ordered an average of 14% of its soybean purchases prior to soybean harvest beginning.

US – EU TRADE FRAMEWORK AGREEMENT

  • On Aug. 21, the United States and European Union released a joint framework agreement regarding trade.
  • According to the announcement, the EU intends to provide preferential market access for U.S. seafood and agricultural goods, including tree nuts, dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, pork, and bison meat.
  • The United States committed to applying the higher of the U.S. Most Favored Nation (MFN) tariff rate or a tariff of 15%, with the exceptions of unavailable natural resources, aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors, which will be subject to only their MFN rates.
  • Christine Lagarde, President of the European Central Bank, acknowledged the importance of the United States as a trading partner but noted Europe should aim to deepen its trade ties with other jurisdictions, citing lingering uncertainty on sector specific tariffs between the entities.

CANADA REMOVES RETALIATORY TARIFFS

  • On Aug. 22, Prime Minister Mark Carney announced Canada will match the U.S. tariffs on goods which meet USMCA origin requirements, removing the 25% retaliatory tariffs Canada imposed on several U.S. products in March.
  • Notably, Canada will retain 25% duties on U.S. steel and aluminum and tariffs on U.S. automobiles.
  • Carney emphasized that 85% of trade between the countries is tariff-free.

Trade Data

OECD-FAO AGRICULTURAL OUTLOOK

  • The Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) are highlighting the projections for animal-source food consumption and production from their recently released Agricultural Outlook 2025-2034.
  • The Outlook projects that global per capita calorie intake of livestock and fish products will increase by 6% over the next decade, driven by rapid rise in lower-middle-income countries, where growth is anticipated to reach 24%.
  • The report also highlights the need for efficient movement of agricultural and fish products across borders and the need for multilateral cooperation and a rules-based global trading system, citing the projection that 22% of calories will cross international borders over the next ten years.
OECD/FAO (2025), OECD-FAO Agricultural Outlook 2025-2034, OECD Publishing, Paris/FAO, Rome, https://doi.org/10.1787/601276cd-en.

Multilateral

WTO PANEL REPORT REGARDING EU DUTIES ON INDONESIAN BIODIESEL

  • On Aug 22, a World Trade Organization (WTO) dispute settlement panel released its report which concluded that certain aspects of the European Commission’s assessments of Indonesia’s biodiesel subsidies were inconsistent with the WTO Subsidies and Countervailing Measures Agreement.
  • Notably, the WTO panel found the European Commission failed to calculate the effect of Indonesian imports on “like products” in the domestic market and improperly found significant price depression.
  • The dispute was initiated in 2023, several years after duties were first applied in 2019.
  • The United States, a third party in the dispute, argued largely in support of the European Union. The United States also maintains antidumping and countervailing duties on biodiesel imports from Indonesia and Argentina.