Comment: Agricultural ship stable amidst a massive storm

​Without change that will remain a poison pill for generations to come. However this week, at a meeting of the International Monetary Fund, she finally appeared to come out fighting for agriculture. Desperate as she is for a trade deal with the United States she made clear in an interview this would not come in return for any weakening of food standards. This is definitely on the American list of demands, and it sparked concerns in the farming lobby that standards could be weakened as part of a deal. However Reeves has nailed her political colours to the mast, insisting this would be unfair to farmers and consumers and is a non-negotiable issue. This is a case of so far, so good, but farmers will not believe any assurances until they see a deal in place without any concessions to the US on importing products that do not meet UK standards. At one level this can be taken as a display of principle; at another it is sound business sense, as gains in trade with the US would be offset by decisions that weaken trade with our nearest, biggest and best market. Despite Brexit that is still the EU. At another level this is perhaps akin to a game of rugby where the referee makes a wrong decision, but cannot change it. In return they are then generous in their next ruling to balance things up. On that basis this is perhaps a still inadequate effort to correct a wrong decision on agricultural property relief. Whatever the reason, the challenge now for the industry is to make sure Reeves and the government stick by what she said as it holds its nose and concludes a trade deal with a US president it neither likes or trusts. Unlike the global economy agriculture has remained a beacon of stability through the chaos caused by Trump's on again, off again, maybe approach to tariffs. This may have accelerated some trade negotiations, but to date the only winners have been those well placed to gain from stock market chaos. Farm commodity prices have remained reasonably stable or even improved, thanks to a new interest in areas where demand is guaranteed, regardless of what happens to the global economy. In that tariff-driven agricultural equation there has been one big loser - American farmers, who mostly supported Trump. They have seen huge markets lost, particularly in China, as a result of retaliatory tariffs. Markets the US has nurtured in China and elsewhere in Asia have disappeared overnight, forcing the US government to buy off farmers with higher support payments. The other side of this coin however is that a huge market opportunity was created for other countries, not least the EU and southern hemisphere. It is this swings and roundabouts outcome that has helped keep the agricultural ship stable amidst a massive storm. A report from the International Monetary Fund (IMF) this week confirmed economic growth globally will be hit by tariffs. The US saw the biggest drop in percentage terms, but its predicted growth rate still outperforms the UK and Europe in particular France, Germany and Italy. One certainty is that the EU is going into the battle over food exports in a uniquely strong position. In 2024 the EU reported record exports for food, both in volume and value terms. This cemented its position as the world's biggest trader of exports and imports in agricultural and food products.

In a game where size equals strength that is important, especially as Europe lines up to permanently take market share for food in China away from the US. EU exports were just over 200 billion and imports, which also rose, were just under 150 billion – a healthy, positive balance of trade by any standards. In the numbers game Europe was responsible for 31 per cent of global trade, while north America was half that at 15 per cent. Thanks to the opportunities the US has created for others the EU is in a position to strengthen its export performance, although the impact of tariffs on exports to the US remains open to question.

This confirms that while tariffs create new opportunities in markets lost to the US there are no winners, if the loss of US markets is the price of securing new opportunities.