India

Dairy Exports Strong Despite Lingering Trade Negotiations

Tue, 22 Jul 2025 15:09:11 GMT

Recently, dairy has been a beacon of shining light when it comes to exports especially when looking at the massive trade deficit U.S. Agriculture is facing as reported by the USDA in the latest Outlook for U.S. Agricultural Trade. In 2024 alone, the U.S. dairy industry bolstered a $2.8 billion trade surplus. In 2025, as of the May U.S. Dairy Trade report rang in new records in cheese exports and strong gains in butterfat up 150% from this time last year. The USDA has forecasted an over $3 billion trade surplus for 2025 and it appears like we are on the right track to make that happen.

There are a few factors that have caused so much demand in U.S. cheese and butterfat products. Mainly, price is a huge determining factor. The U.S. is one of the most competitively priced products in the world right now. The U.S. is the lowest priced product among the top three dairy exporters, under the EU and New Zealand currently. Mostly because U.S. herds have chosen to cull fewer cows based on USDA slaughter data. This causes a surplus in butterfat availability or supply. There has also been a recent decline in usage in the United States, most notably in pizza sales resulting in a surplus of cheese available for export. On the other hand, the EU has struggled to maintain herd size, losing more than 700,000 head from 2023 to 2024 from varying factors but disease has been an issue.

This positive trade balance has not come without struggle. The recent trade negotiations with China have left a massive hole in Dry Whey product demand. India is in turmoil over proposed trade agreements and it makes one wonder what the U.S. dairy export program could have been without hostilities from the Asian market. China is the world’s number one dairy product importer and has been a long standing importer of U.S. Dairy products, accounting for a monthly total varying from 14 to 22% of export volume of U.S. dairy products. In the month of May, we saw low protein whey drop nearly 70% on volume shipped to China compared to May of last year. Skim solids and NDM have been hit hard. In 2024, China accounted for 43% of low-protein why exports alone and 14% of all U.S. dairy products exports.

India’s dairy farmers are concerned with negotiations as the proposed trade deal could lead to a drastic drop in milk prices and a surplus of product in their country. Protestors believe there could be as much as a 15% drop in local milk prices due to an increase in milk imports by over 25 million tonnes. While positive for the U.S. dairy, this is a major hold up of the U.S./India trade deal. India also sites help concerns over GMO’s being introduced to their market. The U.S. in turn has raised formal objections at the World Trade Organization over the dairy certification system India uses. The belief is they cause unfair and unnecessary trade barriers.

Another pain point for U.S. trade, Mexico saw a decline in demand, reducing purchases 12% year-over-year. But increases in cheese demand in Japan and South Korea have more than made up for the deficit.

The future of the U.S. dairy export program has a lot to look forward to. Despite hostile relations with some of our major consumers, we have managed to diversify our availability of markets, shipping more butterfat and cheese in history and to countries we have not seen this type of volume before. Should a trade deal with India or China be accomplished, we have a lot of look forward to but with an air of caution. The reward from high exports has been derived from low U.S. prices compared to the rest of the world and a surplus of whey with no demand is weighing on the farmer’s bottom line. Without a trade deal especially with China, we could see a drop in milk price due to a massive amount of low protein whey, clogging the pipeline with nowhere to go, caused by the huge production of cheese. Luckily, the U.S. dairy industry in innovative and much like us diversifying our exports to new frontiers when faced with the hurdle of trade wars, who knows what solution we will find to the looming whey problem.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

Global Cheese Appetite is Powering Growth for U.S. Dairy

Wed, 21 May 2025 19:27:56 GMT

William Loux, senior vice president of global economic affairs for the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC), says the dairy industry is finally turning a corner. After years of market volatility, he sees growing stability on the farm and rising international demand, especially for cheese and dairy proteins, as encouraging signs of progress.

“I’m pretty optimistic about [the state of the dairy industry],” Loux says. “I’m not always the optimistic person as the numbers guy, I kind of give the ‘real’ talk, but in general, profitability on the farm looks good, and we’ve got a situation where demand, especially internationally, is starting to recover.”

He shared these insights in a recent appearance on “AgriTalk” where he discussed the current state of U.S. dairy and what is driving renewed optimism across export markets.

Cheese is Leading the Charge
While domestic cheese sales remain soft, global cheese demand is accelerating rapidly. Much of that growth is coming from international restaurant menus that are incorporating cheese in new and creative ways.

“I think a lot of that goes to work that the export council has done,” Loux says. “We have a whole cheese marketing program as part of that group internationally. And you can look at [these restaurants] adapting their menus to local tastes, but I think the big success that we’ve also had, for example in Korea, is looking at traditional restaurants, like Korean barbecue, that now has cheese dips as offerings at many of those restaurants. So it’s not just the U.S. coming in and saying, ‘here’s our [restaurant] companies, how do you adapt it.’ It’s the local companies that are also seeing opportunities [to add dairy].”

Loux says this growth in demand is broad-based and happening faster than before the pandemic.

“Over the last 12 months, 12 out of the top 13 global cheese markets have all increased their demand, and that is unusual,” he says. “We are growing at twice the speed we were pre-COVID. The U.S. is the one benefiting here first and foremost, we are growing faster than any other exporter in the world, but we aren’t the only ones. New Zealand and Australia both had record years, Europe is growing, too, so the competition isn’t evading. But at the same time, this demand is a bright spot for global dairy prices. We are seeing good cheese demand [internationally], which we desperately need right now, and that is a positive signal for dairy.”

Beyond cheese, other dairy products are gaining traction in international markets as well. Whey proteins and milk proteins, in particular, are seeing increased demand across Asia. Still, Loux acknowledges the market is mixed.

“When you look outside of the cheese market at everything else, non-fat is a little soft; dry whey — we have some trade issues with China,” he says. “But I look at this market and say, hey, we are finally starting to turn the corner on some of this global demand. There are plenty of risks ahead, but I look at the state of the industry and say that we’ve weathered through some pretty tough times, especially in 2023 and into 2024, and now I think with the capacity, there is a great opportunity for U.S. dairy moving forward.”

Exports as a Balancing Act
Exports play a crucial role in stabilizing and expanding the U.S. dairy industry. Loux points to two key advantages that exports provide.

“First off, it brings balance to your milk check,” he says. “Fundamentally, even as we see higher butterfat in our components, we’re not making pure cream out of the cow. So, we have to find opportunities to grow our skimmed side, and that’s our proteins and caseins. And internationally, folks are demanding more of that and are asking for it — 75% of our nonfat dry milk and 50% of our dry whey goes overseas. And we fundamentally need that to keep our prices balanced.”

Loux also sees exports as a vital engine for long-term industry growth.

“Over the last number of years, the U.S. has increased its cheese exports more than we have increased our domestic cheese consumption,” he adds. “Mexico in particular has been an incredibly strong cheese market for us over the last number of years, but even as they’ve slowed down, because we’ve emphasized being in multiple markets, particularly in Asia and elsewhere, U.S. cheese exports are still on pace for another record year.”

Much of this momentum is tied to protein’s growing popularity worldwide. Once limited to sports nutrition and infant formula, dairy proteins are now appearing in everyday products such as cookies and soups in Japan, signaling a broader shift in consumer demand across global markets.

Expanding Access into the UK
Following the recent announcement of a trade agreement between the U.S. and the United Kingdom, there is cautious hope for increased dairy exports to the region. But Loux urges a measured outlook.

“Right now, not a whole lot has actually been completed,” he says. “When we look at reading the fine print, it really looks like they’ve only agreed to keep talking, and I think they’ve avoided some of the tariffs within the reciprocal agreement. So, we aren’t seeing much access for dairy yet.”

Despite the lack of movement, Loux points out the UK does present significant potential for U.S. dairy exports, as it is the largest cheese-importing country in the world. However, roughly 90% of those imports come from European suppliers.

“As we look at opportunities, the UK buys, imports and eats a lot of cheese,” Loux states. “But they also need proteins, and that’s what the UK wants. And the U.S. is the fastest growing exporter of that product.”

Loux says that if a formal agreement can be reached, the U.S. dairy industry stands to benefit. Still, it all depends on the final details.

“We need to wait to see the fine print and figure out what this deal actually looks like,” he adds.

Tariffs: Short-Term Pain or Long-Term Gain?
When it comes to tariffs, Loux sees them as a necessary part of the conversation, but not a long-term solution.

“I’ll be honest with you, I’m a free trader,” he says. “I’m a fan of exports, but I’m also a fan of consumer choice. At least as it comes to within the U.S. and everything else, I’m fine with Kerrygold or whatever being on the shelves. But I also want the U.S. [dairy] to have access to Irish shelves, right?”

Lack of reciprocal trade, particularly with Europe, remains a major concern for Loux. In some cases, such as retaliatory tariffs on European butter and cheese, there might be justification. But Loux warns that blanket tariffs can have unintended consequences on consumer behavior and the broader economy.

“Ten percent tariffs certainly do have an inflationary aspect to them, and I think that is the risk,” he says. “I’m not going to get too much into the macro side, but if you see U.S. consumers stop going out to eat as much because they’re just in a worse financial position, that’s a risk for dairy markets.”

Rather than more tariffs, Loux advocates for trade agreements that promote open access and growth.

“What we’ve always advocated for in international markets is twofold,” he states. “When we go and have agreements with places like Korea or Japan or Central America, our argument is usually that lower tariffs actually can grow demand overall and benefit both the local industry as well as U.S. dairy exports. And as we look at this internationally, that’s where I’d like to see lower tariffs, not more tariffs. I want more demand and consumption for everybody.”

For Loux, the goal is simple.

“From an economic perspective, I kind of want more demand and more consumption for everybody,” he says.

Trade to India Remains Out of Reach
Recently, India has dominated the conversation when it comes to global trade. However, Loux believes U.S. dairy trade with the country will likely remain out of reach.

“It comes up in every trade conversation, and I think it is probably the most asked question, or most asked country I get asked about,” Loux says. “It’s the biggest dairy consumer in the world. It would make sense as an opportunity for U.S. dairy.”

But despite the sheer scale of potential demand, the barriers remain firmly in place.

“Between the non-tariff barriers and the political sensitivity around dairy, I have no expectations that we’re getting any sort of real access into India,” he explains.

This isn’t a new struggle.

“We have tried for 20 to 30 odd years to get access into India,” Loux adds. “The Kiwis have tried for 20 to 30 years to get access into India. Canadians, too. So far, no one has.”

He remains skeptical about any breakthroughs on the horizon.

U.S. Dairy Remains in a Strong Position
While dairy has certainly seen its fair share of challenges throughout 2025, Loux is encouraged by where U.S. dairy stands today. After years of volatility, he sees signs of recovery, especially as global demand for cheese and proteins gains momentum.

While hurdles like tariffs and trade barriers remain, Loux believes U.S. dairy is well-positioned for growth. He points to recent export success, expanding opportunities in markets like the UK, and the industry’s ability to adapt to shifting global demand.

Challenges with countries like India persist, but Loux is confident that with continued focus and smart trade strategy, U.S. dairy can keep gaining ground worldwide.

Your Next Read: An Incredible Birdseye Look at the State of the Dairy Industry

Promising Potential? Why India Poses the Biggest Opportunity for Trade, But Also the Biggest Challenge

Wed, 23 Apr 2025 15:45:47 GMT

As trade tensions continue to impact both commodity and financial markets, the White House says the Trump administration is making progress on additional trade deals. The news comes as Vice President JD Vance was in the middle of a four-day visit to India, with both countries saying they had made progress in negotiating a bilateral trade deal. Delhi hopes this deal will help it avoid higher tariffs.

Vance announced the U.S. and India have “officially finalized the terms of reference for the trade negotiation.” He called it a “vital step,” saying it sets a roadmap toward a final deal.

India is just one of several trade deals in the works, according to the Trump administration. White House press secretary Karoline Leavitt said on Tuesday the Trump administration now has “18 proposals on paper” for trade deals.

“You have Secretary Bessent, Secretary Lutnick, Ambassador Greer, NEC Director Hassett and Peter Navarro, the entire trade team meeting with 34 countries this week alone,” Leavitt said in the press briefing. “We are moving at Trump speed to ensure these deals are made on behalf of the American worker and the American people.”

Leavitt also announced “the president and the administration are setting the stage for a deal with China.”

The Wall Street Journal reported the White House is considering slashing tariffs in order to de-escalate the trade war. Currently, tariffs are at 145%, but the White House isn’t considering cutting those to zero. Instead, the Wall Street Journal reports those tariffs will likely fall anywhere between 50% to 65%.

However, Treasury Secretary Bessent declined to comment on that report, saying there’s no unilateral offer from President Trump to cut tariffs on China. He also said it could take two to three years to reach a full trade deal with China.

Progress With India
Before the White House’s 90-day pause on higher tariffs for other countries expires on July 9, India is one country rushing to negotiate a trade deal with the U.S.

Just this week, Vance and Prime Minister Modi announced the t erms of reference for a bilateral trade agreement between the U.S. and India. The progress toward the agreement was a result of the meeting between the two this week.

“I am pleased to confirm that USTR and India’s Ministry of Commerce and Industry have finalized the Terms of Reference to lay down a roadmap for the negotiations on reciprocal trade,” Greer said. “There is a serious lack of reciprocity in the trade relationship with India. These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers. India’s constructive engagement so far has been welcomed and I look forward to creating new opportunities for workers, farmers and entrepreneurs in both countries.”

During Vance’s speech in Jaipur prior to that, he said that the two countries had finalized the terms of reference for the negotiation.

“This is a vital step toward realizing President Trump and Prime Minister Modi’s vision because it sets a roadmap toward a final deal between our nations,” Vance said.

India’s Tariffs on U.S. Agriculture Products
India’s tariffs on U.S. agricultural goods are significant, which is a major point of contention in the U.S. and India trade relationship. Walnuts, for example, face a tariff of 100% into India. Vegetable oils have a tariff of up to 45%.

The United States has one of the lowest average applied tariff rates on agricultural products. But many of our trading partners maintain prohibitive tariff rates that constrain export opportunities for American farmers and ranchers.

Unfair and non-reciprocal practices have… pic.twitter.com/mmy5spBEzl
— United States Trade Representative (@USTradeRep) April 23, 2025

The U.S. argues these tariffs are unfair trade barriers, and Mark Knight of Farmer’s Keeper Financial told AgDay the U.S. relationship with India over the years has been complex and strange.

“Sometimes it’s friendly, for the most part. But that’s a giant population, and it would go a long way toward making a potential deal with China less important if we could strike some deals with some of these other countries — especially India. We haven’t had something in place with India for years.”

India Has the Most Potential, But Poses the Biggest Problem
If you want to understand just how problematic India has been for trade in the past, just talk to Gregg Doud. He’s the current CEO of National Milk Producers Federation (NMFP) but served as the chief ag trade negotiator during the first Trump administration.

During an episode of “Unscripted” earlier this year, he said India has the most potential, but is the biggest problem.

Doud says history shows you India has been a problem, as the U.S. essentially kicked India out of the World Trade Organization (WTO) in the past. The U.S. did finally agree to allow India back into the WTO, but under certain terms.

“I don’t want what I’m about to say to be seen as being negative toward the discussion between Modi and President Trump earlier this year, but one of the wins we did get in agriculture — which is my understanding based on some conversations — is that India lowered the tariff on U.S. bourbon from 150% to 100%,” Doud says.

He says while that may not have been the only win, it serves as an example for how difficult it is to negotiate with India.

India is a big customer of one main U.S. ag product, though: almonds .

In the 2023/24 crop year, the U.S. exported over 400 million lb. of almonds to India, making it the largest export market for California almonds. This was a 21% increase compared to the previous year. India’s almond imports from the U.S. were valued at $932 million in FY 2023.

India is the United States’ top buyer of almonds.

(U.S. Almond Board )

Doud says India has high tariffs to protect their own farmers.

“Think of it as a half billion farmers in India whose electricity, water, fuel, fertilizer and seed is all subsidized. India wants to keep that out in the country, and if we do anything that drives rural Indian folks into the cities, it would overwhelm them. This is the mindset,” Doud says. “I remind people, it was 5 or 6 years ago that India made a modicum of reforms of their domestic agricultural markets. There was so much unrest over those changes that Modi agreed upon to make, that three years later, they had to repeal the law.”

India’s Tariffs Crushed Apple Exports
U.S. apples are one commodity that has suffered from India’s retaliation in 2018.

“In 2018, India was the No. 2 market for U.S. apples until their retaliatory tariffs crushed our exports to near zero. They are rebounding back, but it might take years to return to the previous levels,” says Jim Bair, president and CEO of the U.S. Apple Association, in an interview with Farm Journal’s The Packer. “If the White House can facilitate that in a trade agreement with India, U.S. Apple wishes them Godspeed, and not a moment too soon.”

U.S. Apple says in 2018, India was the number two market for U.S. apples until retaliatory tariffs crushed their exports to near zero.

(U.S. Apple Association )

Potential With India
As the world’s most populous country, India holds massive potential if a trade deal can be struck. It boasts one of the fastest growing economies in the world with households that are seeing a high levels of consumer spending. That means agricultural products would be more accessible to a larger number of people.

According to USDA , top agricultural prospects for U.S. exporters include:

Cotton
Dairy products
Ethanol
Fresh fruit
Forest products
Processed food and beverages
Pulses
Tree nuts

USDA says in FY 2023, India imported $37 billion of agricultural and related products from across the world, with imports up 51% over the past five years.

“Proportional to its population, India imports a relatively small value of products. Comparatively, China, a country with a similar population size, imported $262.7 billion during the same period. Currently, India ranks behind much lower population countries like Canada and South Korea in total agricultural and related imports. This relatively low level of imports suggests good opportunities for future growth,” the USDA report stated.

Much of the recent growth of imports in India is with vegetable oils, which is the country’s top imported ag product.

USDA says imports of vegetable oil increased by $9 billion, nearly doubling in 5 years, to a total of $18.4 billion in FY 2023.

The United States has occasionally been a supplier of soybean oil to India, but imports face stiff competition from other substitutable oils like palm and sunflower, and from imports from India’s traditional soybean oil suppliers: Argentina and Brazil.

Butter from India Could Displace U.S. Butter

Thu, 17 Apr 2025 18:38:44 GMT

India, the world’s top milk-producing country, is home to four times as many people as the United States and nearly seven times as many cows. The country is the world’s largest butter producer, and a recent Global Agricultural Information Network (GAIN) report predicted that Indians would consume 7.1 million metric tons of butter in 2025. That’s nearly four times as much as second-ranked Europe, noted Sarina Sharp, analyst with the Daily Dairy Report.

“India’s butter output outpaced its colossal 2024 consumption and is expected to do so again this year, thanks to successful efforts to boost Indian milk output. India’s butter surplus has dragged down prices and boosted exports,” Sharp said. “The country’s butter values slumped to multi-year lows in early 2024, making domestic butter far cheaper than product from traditional exporters, including Europe, New Zealand, and the United States. Bargain pricing prompted a surge in international sales.”

Last year, India sold 55,000 metric tons of butter abroad, its highest volume ever, and exports remain strong in 2025. The uptick in India’s butter exports has helped the country’s butter market rebound from last year’s lows.

“While Indian butter is still significantly less expensive than butter from New Zealand and Europe, the weaker dollar and setback in U.S. prices have also given American butter an advantage in some markets. But the presence of Indian butter, an affordable alternative, on world markets could keep pressure on U.S. butter prices, which have also been weighed down by overproduction,” Sharp said.

While India is gradually becoming an exporter of butter, its dairy industry remains highly protected, Sharp noted. India’s policy restrictions and high tariffs limit the ability of the U.S. dairy exporters to increase market share in the country.

Albumin and lactose are among India’s top dairy imports, and they have been increasing significantly in recent years. These dairy ingredients are used primarily in manufacturing of non-food applications, such as pharmaceuticals and dietary supplements, according to the Indian Times. U.S. dairy exports to India consist mostly of milk whey, albumin, and lactose.

In late May, an Indian trade delegation will travel to the United States to continue negotiations on a bilateral trade agreement between the two nations. However, a significant easing of India’s dairy protectionism is unlikely. Top policymakers in India have recently voiced concern that easing or eliminating import restrictions on dairy could disrupt the financial well-being of its 80 million farmers.

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Trump Moves to Impose Reciprocal Tariffs, And It Could Reshape U.S. Trade Policy

Thu, 13 Feb 2025 20:42:48 GMT

President Donald Trump signed an executive order on Thursday , directing his administration to impose reciprocal tariffs on foreign countries with high tariffs and non-tariff barriers on U.S. exports.

These customized levies, expected to be finalized by April, are designed to rebalance trade relationships and target unfair practices, including subsidies, regulations, and exchange rate manipulation.

The proposed tariffs will be calculated on a country-by-country basis and could apply broadly to industries such as automobiles, semiconductors, and pharmaceuticals. Trump cited the European Union’s value-added tax (VAT) and restrictive regulations as examples of unfair trade practices, along with Japan and South Korea, which he claims have long taken advantage of the U.S.

“Whatever countries charge us, we will charge them back,” Trump said from the Oval Office, declaring the end of what he sees as a one-sided trade relationship. He indicated that additional import taxes beyond reciprocal tariffs would be imposed later.

Of Note:

The Trump Administration will first look at the countries with the highest tariffs on U.S. goods. An official briefing reporters said the tariffs could come into effect in weeks or months.

“For many years the United States has been treated unfairly by trading partners, both friend and foe,” according to a memorandum Trump signed. “This lack of reciprocity is one source of our country’s large and persistent annual trade deficits in goods. I’ve decided, for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America,” Trump said in announcing the new tariffs. “In almost all cases, they’re charging us vastly more than we charge them, but those days are over.”

Trump also said that tariffs on cars, semiconductors and pharmaceuticals in addition to the reciprocal tariffs will come “shortly.”

The official briefing reporters said the aim is to have discussions with countries about how their policies have created a trade imbalance and that Trump would be more than happy to lower tariffs if countries want to pare their tariffs or remove other trade barriers.

Marks a Major Shift in U.S. Trade Strategy

The reciprocal tariff plan marks a sharp departure from the “most favored nation” principle that has guided global trade policy since the post-World War II era. Under this system, all trading partners receive equal treatment unless covered by a specific trade agreement. Trump’s new approach aims to align U.S. tariff policies with those of its trading partners, effectively abandoning this long-standing norm.

Howard Lutnick, Trump’s nominee for Commerce Secretary, said studies and calculations would be completed by April 1, after which Trump could act immediately. The tariffs will require detailed analysis for nearly 200 countries, each with its own complex tariff schedules and trade regulations — a big task for the U.S. Trade Representative and Commerce Department.

Key: The executive order says: “Within 180 days of the date of this memorandum, the Director of the Office of Management and Budget shall assess all fiscal impacts on the Federal Government and the impacts of any information collection requests on the public, and shall deliver an assessment in writing to the President.”

You can read the full White House Fact Sheet here .

Negotiation or Brinkmanship?

While the plan seems aggressive, Trump’s decision to delay immediate implementation could be a strategic move to encourage negotiations, as he successfully did with Mexico, Canada, and Colombia. He emphasized that he would be open to reducing tariffs if other nations lowered theirs or eliminated non-tariff barriers. “It’s a two-way street,” Lutnick said, suggesting the administration remains flexible if partners engage in reciprocal concessions.

However, Trump stated that exemptions and waivers would be rare. He referenced Apple Inc.’s past exemption during his China tariffs but insisted this round would apply to all companies and countries without exceptions.

Global Implications

The new tariff plan could particularly hurt developing nations that impose higher average duties on U.S. imports. It differs from Trump’s earlier campaign proposal for a universal tariff on all imports. Instead, reciprocal tariffs will be tailored to match specific foreign policies and trade barriers.

India could be one of the hardest-hit countries, with its historically high tariffs on U.S. goods. Trump’s announcement came just hours before a scheduled meeting with Indian Prime Minister Narendra Modi, signaling that the topic would feature prominently in their discussions.

Trump’s tariff push follows his earlier move to impose a 10% tariff on Chinese goods and plans for 25% tariffs on U.S. steel and aluminum imports next month. The breadth of the new directive suggests a significant expansion of his trade war strategy, which has already injected uncertainty into global markets and left businesses waiting for clarity.

Of note:
While Trump and his advisers blame U.S. trade deficits on unfair foreign practices, many economists argue these imbalances are largely driven by broader macroeconomic factors, such as consumer demand, the U.S. dollar’s status as a reserve currency, and global appetite for U.S. assets.

Farm Groups and Farm-State Lawmaker Reactions: Growing Alarm Over Reciprocal Tariffs

Trump’s proposal for reciprocal tariffs will likely spark reactions from some U.S. farm groups and lawmakers representing agricultural states, many of whom fear negative impacts on rural economies and American farmers.

Key Concerns from the Agriculture Sector

Loss of Export Markets: Many farmers fear that countries like Japan, South Korea, Mexico, and the EU will retaliate by targeting U.S. corn, soybeans, pork, dairy, and beef exports.
Financial Pressure on Farmers: After years of trade uncertainty and declining commodity prices, new tariffs could push many farms to the brink of bankruptcy.
Global Competitiveness: Other countries, such as Brazil and Argentina, could quickly fill the void in markets like China, permanently reducing U.S. market share.
Rural Economic Decline: Tariffs on farm goods have a ripple effect, hurting local businesses, equipment manufacturers, and rural banks that rely on the agriculture economy.

What Farm Groups May Demand

Exemptions for Agricultural Exports: Some farm groups are urging the White House to exempt agricultural products from reciprocal tariffs to avoid retaliation.
Prioritize Trade Agreements: Several organizations called for the administration to focus on new trade deals rather than escalating tariff battles.
Direct Financial Support: If tariffs are imposed, farm groups will push for expanded federal relief programs like those used during the U.S./China trade war.

Global and Economic Reactions to Trump’s Reciprocal Tariff Plan

President Trump’s proposal to impose reciprocal tariffs has triggered mixed reactions from global leaders, economists, and business groups, with many warning of significant economic repercussions and potential retaliation from U.S. trading partners.

International Response: Concern and Potential Retaliation

European Union (EU): EU officials expressed concerns about escalating trade tensions and hinted at preparing countermeasures. The EU is particularly sensitive to Trump’s criticism of its value-added tax (VAT) system and regulatory barriers.
Japan and South Korea: Both countries are seen as key targets of the new tariffs. Japanese trade officials stated that they were monitoring the situation closely and emphasized the importance of open markets. South Korea warned that reciprocal tariffs could disrupt supply chains, particularly in the technology and automotive sectors.
India: With historically high tariffs on U.S. goods, India is one of the most affected nations. Prime Minister Narendra Modi is expected to address the issue in upcoming talks with Trump. Analysts predict India could seek bilateral negotiations to avoid harsh tariff penalties.
China: Though not directly addressed in this announcement, China could view the move as part of Trump’s broader trade war strategy, increasing tensions even further. Chinese officials reiterated their stance on global trade stability and multilateral solutions.

Economic Experts: Risks of Economic Disruption

Most economists criticized the plan, arguing that trade deficits reflect structural economic factors, such as consumer spending patterns and currency valuation, rather than unfair trade practices alone.

Bloomberg Economics predicted significant disruptions in emerging markets, where tariffs on U.S. goods are generally higher, and economies are more vulnerable.
Trade Uncertainty: Businesses fear an unpredictable environment. Companies dependent on global supply chains—especially in the automotive, semiconductor, and pharmaceutical industries—are bracing for increased costs and operational complexity.
Potential Consumer Impact: Higher tariffs could lead to increased prices for U.S. consumers, particularly on imported goods like cars and electronics, experts warned.

Business Community Reaction: Cautious but Wary

U.S. Chamber of Commerce: Called for careful negotiation to avoid a full-blown trade war. “Reciprocal tariffs may help level the playing field,” a spokesperson said, “but they should be used as a last resort.”
Tech Industry: Companies like Apple are watching closely, given the potential impact on semiconductors and electronics imports. While Trump had previously granted Apple exemptions, this round may be far more restrictive.
Automotive Sector: Industry leaders warned that tariffs on car imports could reduce competitiveness and lead to job losses in U.S.-based manufacturing plants dependent on imported components.

Global Markets on Edge

The announcement injected volatility into global financial markets, with stocks in industries such as automotive, technology, and pharmaceuticals facing pressure. Investors remain uncertain about how aggressively the U.S. will enforce these tariffs and whether it could trigger retaliatory measures that harm global growth.

Expanded Global Country Responses and Market Impact

President Donald Trump’s plan for reciprocal tariffs has drawn sharp reactions across the globe, leaving governments scrambling to assess the potential consequences. The global financial markets have also reacted with volatility, particularly in industries most likely to be affected by the proposed changes.

Country-Specific Reactions

European Union (EU): Preparing for Retaliation
The EU sees Trump’s tariff strategy as a direct threat to its trade practices.

Targeted Sectors: Trump has repeatedly cited the 15% VAT and restrictions on U.S. agricultural exports as examples of unfair barriers.
Possible Retaliation: The EU is considering countermeasures, likely targeting U.S. agricultural products, Boeing aircraft, and tech companies.
Official Response: EU Trade Commissioner said, “We urge the U.S. to avoid actions that disrupt the global trade system. If necessary, the EU will defend its interests.”

Japan: Concern Over Automotive and Tech Exports

Japan is alarmed by the possibility of tariffs on automobiles and semiconductors, two of its most critical exports.

Automotive Sector: Tariffs on Japanese cars could significantly impact the country’s economy, where automobiles account for nearly 20% of total exports to the U.S.
Tech and Electronics: Semiconductor and electronics companies like Sony and Toshiba are bracing for higher costs and potential supply chain disruptions.
Diplomatic Response: Japan’s Ministry of Trade warned that “the move could destabilize longstanding trade ties” and emphasized the importance of resolving disputes through multilateral frameworks like the WTO.

South Korea: High-Tech Industries at Risk
South Korea’s tech and pharmaceutical sectors are directly in the line of fire.

Samsung Electronics, one of the world’s largest semiconductor manufacturers, stands to be heavily affected if Trump’s tariffs cover microchips.
Auto Industry: Hyundai and Kia have expressed concerns over potential tariffs on vehicle imports, which would raise prices for U.S. consumers and reduce their competitiveness.
Government Stance: The South Korean government indicated it would seek bilateral negotiations and warned that tariffs could lead to mutual economic harm.

India: High Tariff Barriers in Focus
India could be one of the hardest-hit countries due to its high tariffs on U.S. imports, especially in agriculture, medical devices, and tech products.

Key Sectors: U.S./India trade tensions are likely to rise, particularly in the pharmaceutical and automobile sectors, where India has long imposed protective tariffs.
Modi-Trump Talks: Prime Minister Narendra Modi is expected to use upcoming talks to negotiate exemptions or reductions in targeted areas.
Domestic Impact: Analysts warn that higher tariffs could reduce India’s access to critical U.S. technology and agricultural products, affecting domestic businesses and consumers.

China: Watching Closely
Although China was not a primary target of this announcement, it remains cautious, given Trump’s history of escalating trade disputes.

Strategic Watch: Chinese officials see Trump’s move as part of a broader trade containment strategy.
Potential Retaliation: If included in future tariff rounds, China could respond by targeting U.S. agricultural products, energy exports, and tech firms.

Market Impact: Volatility and Sectoral Effects

Trump’s announcement has caused uncertainty in global financial markets, with some sectors feeling immediate pressure.

Stock Market Reactions

Automotive Stocks: Companies like Toyota, Hyundai, and BMW saw share prices dip on fears of higher tariffs and reduced competitiveness in the U.S.
Tech Sector: Semiconductor giants such as Samsung and Intel are facing concerns about increased costs if tariffs extend to microchips and related technologies.
Pharmaceuticals: Multinational drug manufacturers, including Pfizer and Novartis, are bracing for disruptions in global supply chains and higher costs.

Currency Market Volatility

The announcement triggered fluctuations in Asian and European currencies as investors assessed the risk of a full-scale trade war.
The U.S. dollar initially strengthened on expectations that tariffs might reduce the trade deficit, but analysts warn this could be temporary if retaliatory measures weaken U.S. exports.

Commodity Market Impact

Agricultural Commodities: Potential retaliatory tariffs from trading partners could hit U.S. farmers, particularly those exporting soybeans, corn, and dairy products.
Steel and Aluminum: Following earlier tariffs on these products, prices for industrial metals may rise further, increasing production costs in manufacturing-heavy industries.

Broader Economic Consequences

Economists caution that the uncertainty alone could slow global growth by reducing business investment and cross-border trade.

Supply Chain Disruptions: Many industries rely on global supply chains, and new tariffs could force companies to restructure operations at significant cost.
Consumer Prices: U.S. consumers may face higher prices on imported goods, particularly in sectors like electronics, automobiles, and household goods.

Long-Term Risks

Global Trade Fragmentation: If other countries adopt similar protectionist measures, it could lead to the fragmentation of the global trading system, reversing decades of economic integration.
Shift in Trade Alliances: Countries excluded from U.S. tariff targeting may seek regional trade alliances to reduce their dependence on U.S. markets.

India Continues to Improve Dairy Output While Consumption Grows

Wed, 08 Dec 2021 15:22:46 GMT

Population in India, the world’s largest consumer and producer of milk when including buffalo milk, is anticipated to grow by 272 million people by 2050. However, it is unclear whether the country’s dairy industry will be able to meet its growing demand for milk and dairy products, or whether production will exceed domestic needs.

According to a 2019 United Nations report, India could supplant China as the world’s most populous country by 2027 and remain there through the end of the century. In 2019, India’s economy surpassed both the United Kingdom’s and France’s as the world’s fifth largest, with GDP of $2.94 trillion.

“After experiencing sustained growth in recent years, India is poised to consolidate its position as the world’s largest producer and consumer of milk,” said Monica Ganley, analyst for the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aries.

According to a recent USDA Global Agricultural Information Network report, India’s milk production is estimated to grow 2.2% in 2021 to reach a total of 199 million metric tons (MMT). USDA expects output to expand another 2.3% next year. Over the next decade, USDA projects India milk production will rise another 130 MMT.

While the majority India’s milk production is sourced from water buffalos, the share of cow’s milk has been climbing, Ganley noted. In 2021, she said cow’s milk will account for 48.2% of the country’s total milk production.

“The country’s small dariy farms generally prefer to milk water buffalos because their milk is higher in fat and they generally withstand the climate better than Holsteins and other traditional dairy cows,” Ganley noted. “Furthermore, water buffalos can be slaughtered, providing an additional revenue stream to Indian producers, while the slaughter of dairy cows is outlawed in most parts of India for religious reasons.”

Nearly all the milk produced in India is consumed domestically, with only nominal volumes of product sent to the export markets, Ganley said. Slightly more than half of India’s milk production is formally processed while the remaining 48% is consumed on farm or sold through informal channels.

Dairy products, particularly yogurt, cheese, and ghee, are considered staple foods in India, where large numbers of vegetarians depend on dairy as a key source of protein in their diets, Ganley said. India’s growing population and the country’s large number of younger consumers who tend to favor dairy products bode well for the future of dairy consumption. However, with milk production also expected to grow, it is uncertain whether production growth will fall short of or exceed rising demand

“India’s per capita dairy consumption of 0.9 lbs. per day already is believed to exceed the world average by 33%. Thus, if milk production increases significantly in coming years and demand growth doesn’t keep pace, India could soon be looking to the global market to offload excess production,” Ganley said.