TRADE UPDATE

Food & Agriculture
Aug. 5, 2025

Prepared by DTB AgriTrade

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HIGHLIGHTS

  • Liberation Day Redux:
    • President Donald Trump issued an Executive Order Aug. 1 setting new tariff rates for dozens of countries that will take effect Aug. 7 (aside from a 35% tariff on Canada, which took effect Aug. 1).
    • The United States and South Korea reached a trade deal on July 30.
    • U.S. Trade Representative Jamieson Greer says the new preliminary trade deals the Trump administration has reached, including the investment and purchase commitments, will stand regardless of what the courts decide regarding presidential tariff authority.
  • USDA Reorganization:
    • On Wednesday, July 30, the Senate Agriculture Committee held a hearing on the USDA reorganization proposal.
    • USDA opened a public comment period on the reorganization plan after frustration from allies on Capitol Hill and in the agriculture industry, who felt surprised by and left out of the plans.
    • Luke Lindberg has been confirmed to be USDA’s under secretary for trade and foreign affairs.
  • USMCA:
    • The USITC held a hearing on dairy markets on July 28.
  • World Trade Organization:

“[Trump]’s elected to assess the foreign affairs situation in the United States and take appropriate action. There’s just no question that it’s both from a legal perspective, it’s completely permissible. And from a policy perspective, that’s what he’s elected to do.”

—U.S. Trade Representative Jamieson Grier on CBS’ Face the Nation on the Aug. 1 tariff announcements.

Recent Tariff Announcements

Aug. 1 Country-Specific Reciprocal Tariffs

  • President Donald Trump issued an Executive Order on Aug. 1 setting new tariff rates for dozens of trading partners. The order listed almost 70 countries that will face tariffs ranging from 15% to 41% (some were reduced from their April 2 “Liberation Day” rates and some increased). All other countries will face a 10% baseline tariff. The tariffs are scheduled to go into effect at 12:01 a.m. on Aug. 7 according to a White House fact sheet.
    • Goods loaded onto ships prior to Aug. 7, and that enter the United States before Oct. 5, will be subject to their former tariff rates.
    • Transshipped goods, exports that are transited through a third country without additional transformation and then labeled as from that country, will be subject to a 40% tariff rate.
    • An increased 35% tariff on Canada took effect on Aug. 1. However, goods meeting the origin requirements under the U.S.-Mexico-Canada Agreement will not be subject to the new 35% tariff. Autos, steel, and aluminum from Canada are subject to U.S. sectoral tariffs.
    • On July 31, Mexico received a 90-day extension, which will give the country more time to reach a deal with the U.S.
  • The new duties will bring the U.S. average effective tariff rate to 17.3%, the highest level since 1935 according to the Budget Lab at Yale.

Preliminary Trade Deals

  • On July 30, South Korea reached a preliminary trade deal with the United States. Korean goods will face a 15% tariff, including autos, a key Korean export. Korea agreed to invest $350 billion in the United States, supporting sectors such as shipbuilding, chips, and batteries. Korea also agreed to purchase $100 billion worth of U.S. energy products.
  • To date, several new trade deals have been announced, though only a few (notably, the UK and Indonesia) have resulted in public joint statements.
  • Reports also suggest that there is an agreement with Pakistan.
  • Most of the preliminary deals include promises of investment in and purchases from the U.S.
  • These promises could be jeopardized if the current appeals case ruling goes against Trump’s authority to impose tariffs under the IEEPA. However, U.S. Trade Representative Jamieson Greer says the deals will endure even in the event of an unfavorable ruling.

Executive Order Ending the De Minimis Exemption

  • Trump issued an Executive Order ending the de minimis exemption on July 30. De minimis treatment waives duties for shipments of $800 or less. The order will take effect Aug. 29.
  • The White House fact sheet calls the exemption a “catastrophic loophole” that “has been abused, with shippers sending illicit fentanyl and other synthetic opioids, precursors, and paraphernalia into the United States in reliance on the lower security measures applied to de minimis shipments, killing Americans.”
    • The move was presaged in an Executive Order last April, which included a pledge to abolish the de minimis program once the Commerce Department gave the green light that the United States was prepared to collect duties on low-value shipments. Additionally, the One Big Beautiful Bill repealed the legal basis for the exemption, effective July 1, 2027.
    • For shipments in the international postal network, tariffs will either be based on the value of the package (an ad valorem duty) or will be $80 to $200 (a specific duty, based on the country of origin).

USDA Updates

Hearing on USDA Reorganization

  • On Wednesday, July 30, the Senate Agriculture Committee held a hearing on the USDA reorganization proposal.
    • Secretary of Agriculture Brooke Rollins announced the reorganization plan on July 24. The plan involves closing the USDA South Building and relocating about half the Washington, DC, staff 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.”
  • Deputy Agriculture Secretary Stephen Vaden answered questions from the full committee. A particular focus of the hearing was whether the Trump administration gave sufficient notice to Congress before announcing the move.
    • In response to questions from Sen. Amy Klobuchar (D-MN), Vaden said USDA would be consulting with agency employees and other stakeholders.
    • Sen. John Hoeven (R-ND) said Congress “has something to say about” the reorganization “both from an authorization standpoint, and certainly from an appropriation standpoint.” He continued “is this a process where we’re going to work together on an outcome, or is this an outcome that we’re not just going to talk about, but as a fait accompli?”
    • In response to questions from Sen. Jerry Moran (R-KS), Vaden suggested USDA’s Foreign Agricultural Service mission area might be less affected given its diplomatic role and international focus.
  • Vaden claimed the overall USDA overhaul, which also included voluntary deferred resignation of approximately 15,000 USDA employees, could save the federal government up to $4 billion.
Deputy Secretary of Agriculture Stephen Vaden testifying at the Senate Agriculture Committee

Luke Linderberg Confirmed

  • Luke Lindberg was confirmed Aug. 1 by the Senate to be USDA’s undersecretary for trade and foreign affairs in a 77-18 vote.

USMCA

USITC Hearing on Dairy Markets

  • At the request of the U.S. Trade Representative, and in preparation for the upcoming U.S.-Mexico-Canada Agreement (USMCA) review, the U.S. International Trade Commission (USITC) held a hearing on July 28, “Nonfat Milk Solids: Competitive Conditions for the United States and Major Foreign Suppliers.”
  • Canadian dairy policy has been the subject of multiple trade disputes going back decades, including through the WTO and USMCA dispute settlement processes.
  • Trump frequently criticizes Canada’s dairy tariffs, and recently cited this as a reason for increasing tariffs on Canada.
  • The hearing featured witnesses from U.S. and New Zealand dairy producer and industry groups who focused on how supply management in Canada allows its dairy producers to capture value from the most valuable components of milk (i.e. butterfat) while effectively subsidizing exports well below cost of production of less valuable components (e.g. milk protein), which drives down prices for producers in other countries. 
  • The hearing also covered trade-distorting policies in other countries, such as India, Turkey, and the EU.
  • The USITC will continue its investigation and produce a final report to transmit to USTR by March 23, 2026, in time for the USMCA review process.

World Trade Organization

American Named Deputy Director-General for WTO

  • World Trade Organization Director-General Ngozi Okonjo-Iweala named Jennifer “DJ” Nordquist as her newest deputy, beginning Oct. 1. Nordquist has served in both Trump administrations and is currently a counselor on the White House Council of Economic Advisers.
    • “She will work as part of the senior management team with me and the other DDGs, driving forward our objective of helping our members use trade as a means to raise living standards, create jobs and improve people’s lives,” Okonjo-Iweala said in a statement.
    • One of the current deputies, Angela Ellard of the United States, stepped down Aug. 1. The other current deputies, who have been appointed to serve in Okonjo-Iweala’s second term starting Sept. 1, are Johanna Hill of El Salvador, Jean-Marie Paugam of France, and Zhang Xiangchen of China.