Whoever wins the 2024 presidential election Virginia’s agribusinesses—food, fiber and fuel produced in the Commonwealth— are expecting things to change.
“We don’t make sugar, we don’t grow bananas; about everything else you can get from here,” Cliff Williamson with the Virginia Agribusiness Council told Radio IQ about how broad his industry is in the Commonwealth.
And Williamson said it’s been a rocky decade for those industries. Former President Donald Trump put tariffs on goods he helps advocate for, and President Joe Biden has maintained some tariffs while aiming to provide federal aid to boost American businesses with results still to be determined.
And as we look to 2024’s election, Williamson is warning any increase on tariffs could hurt Virginians’ bottom lines.
“We see a market retraction away from high-risk sales.” Williamson said. “And when people don’t understand what’s going to happen, people quit spending money on it.”
Williams pointed to Virginia apples as good example of this issue. Some overseas markets love them -there’s a unique flavor and relationship with the Virgina producer- but it's not large enough scale.
"When a 20% tariff gets applied, that foreign company can’t justify the spending," he said.
There's also the broader impact on shipping; the more unique the product, the harder it is to ship. And if there are fewer exports of those unique products, that causes the price of shipping to increase.
Terry Rephann is an economist at the Weldon Cooper Center at UVA.
He said the recent short-lived strike at the Port of Virginia gave the country a sneak peek at what could come under a larger tariff regime.
“People might conceptually not think it all through until it impacts their daily lives, till they can’t get the things they like or they’re more expensive," he told Radio IQ.
Rephann said Trump’s experiments with tariffs before, and promises to add even more if he wins, aren’t likely to inspire much confidence in Virginia.
“What’s leading to more imports is consumers' growing tastes for exotic products, things produced in other countries during their growing seasons,” he said, suggesting increased import costs via tariffs could see some luxury goods Virginians have become accustomed to becoming too expensive if not unavailable entirely.
“I don’t think we’re gonna be growing any bananas or coffee beans,” he said.
He also pointed to Biden’s continued use of tariffs on some goods and increases on those like Chinese green energy technology and electric vehicles. While federal money has gone to support a growth in US manufacturing, Rephann said Biden-era “plant openings” may be better considered “ground breakings.”
“The business model is not good in the US, even with federal tax credits,” he said.
Among manifestations of that plan was the canceled creation of a Chinese-owned battery plant in Southside Virginia, something Governor Glenn Youngkin nixed over national security concerns.
“Well okay, if they’re gone, they won't be producing these low-cost batteries in the US, what do you do now?” Rephann asked.
And while Trump has promised an increase in onshoring, bringing overseas manufacturing back to the US, Rephann said any closure of economic borders will lead to increased costs if not outright inflation.
“You do that, you sacrifice a degree of quality of life, prices go up,” he warned. “There’s a price to be paid for that safety and security. It doesn’t mean everyone wins; it means the dollar doesn’t go as far.”
Still, that economic uncertainty has been good news for Virginia agribusiness in the short term.
“People are afraid they’ll see a change in the global dynamic regardless of who wins, and they want to shore that up,” Williamson said of increased purchasing of Virginian goods ahead of November. “We’re seeing that excess supply in this year’s harvest is finding an outlet overseas.”
“That said,” he added. “We import a lot. Even if our manufacturers are growing all the corn they need, they still need to import exotic goods.”
Questions about Trump’s proposed tariff increases sent to his Virginia campaign HQ and Governor Youngkin were not returned.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
