Podcast - Insights on the Trump Administration's Agriculture and Food Policy Priorities

Pete Tabor: Hey, everyone. Welcome to another edition of Holland & Knight's Eyes on Washington podcast series. My name is Pete Tabor. I'm in the Holland & Knight Public Policy & Regulation Group and a co-lead of our Agriculture & Food [Policy] team, along with my colleague Liz Craddock. And we're pleased to join you today to discuss the Trump agriculture and food policy priorities. I think this is going to be an interesting conversation where we will dive into several topics that I think are of keen interest to our clients and others in the food and ag space. There's a lot of changes we know are coming with, not only the new administration, but new leadership in the Senate and continued Republican leadership in the House. And so we've got a lot to discuss. I'll introduce myself briefly and then let my colleague Liz do the same. So I'm Pete Tabor with Holland & Knight, been with the group for about three years. I've been working in agriculture for more than 20, including 14 years at the U.S. Department of Agriculture, worked on a variety of trade and regulatory issues throughout my career related to food and ag in both market access to Latin America, Asia, including China, etc. and some of the regulatory work on things like FSMA. Liz, you want to introduce yourself?

Liz Craddock: Yeah. Thanks, Pete. Hi, everyone. I'm Liz Craddock, also a partner here at Holland & Knight in our Washington, D.C., office. I have spent a little over two decades in Washington, D.C., working on agriculture policy matters. I spent a decade working for Senator Mary Landrieu of Louisiana, where I handled agriculture policy for her, including helping manage two farm bills during that time, as well as significant disaster-related relief for farmers in Louisiana after devastating hurricanes, obviously Katrina being one of those. So happy to be here with you today, Peter. I think that there is a lot of movement in this space, especially with a new administration and a new Congress coming in. There's a lot of weighty topics to discuss.

Pete Tabor: Agreed. So let's get into it. Just to give you a rundown of what we plan to cover during this session, we're going to talk first and foremost about the farm bill. We're going to start off with the Farm Bill, which I think is a high priority for many in the agriculture and food community. So we'll discuss that and see where we, where things are, where things are headed. Then we're going to talk a little bit about USDA leadership, because we've got a new a secretary that President-Elect Trump announced or appointed, and we'll look at the impact she will have if confirmed and RFK Jr.'s role in agriculture and food policy. Then we'll jump to tariffs. It's been a topic during well, it started with the Trump Administration, it has continued during the Biden Administration, the use of tariffs, and importantly retaliation against U.S. products, and a lot of times we're talking about agriculture there. Then we'll look at the issue of labor and specifically documented and undocumented workers, mass deportations, a lot of the campaign promises that President-Elect Trump made, we'll discuss that and its impact on agriculture and food, and we'll wrap up with USMCA review, which is, you know, there's many threads of things I just discussed that are going to end up in some way, shape or form being discussed in USMCA review. So with that, let's get to our first topic. I'm going to hand it over to Liz to get us started on the Farm Bill. Liz, where do things stand and what can we expect?

Liz Craddock: Yeah. Well, Pete, as you know and as most listeners probably know, the Farm Bill continues to be stalled in the current 118th Congress. You know, I think many were hoping that we might see some significant action moving forward on reauthorizing the Farm Bill during this lame duck session of Congress. And unfortunately, we aren't seeing too much traction. We know that Senator Stabenow and her team, along with Boozman and the House side, are continuing to throw proposals back and forth at each other. Just, I think this morning or maybe over the weekend, you know, Senator Stabenow did offer up another proposal. But I think it's unlikely, given this late stage in the game, that we're going to see the Farm Bill get reauthorized this Congress. I think many were really hoping we might even see the short term extension of the Farm Bill on the NDAA or National Defense Reauthorization Act. Now, that text was released over the weekend, and unfortunately, there's nothing Farm Bill-related in the version of that bill. So it looks like if we're going to see action either on a short-term or potentially long-term Farm Bill reauthorization, it's either going to have to pass as a standalone measure at this point, pretty much requiring full unanimous consent in the Senate, or potentially there's still an opportunity to put it on the C.R., Continuing Resolution, that still needs to get enacted, which is likely to move next week. So I think at this point, it is likely that it will be pushed into the 119th Congress. You know, as a reminder, the original expiration of this five-year Farm Bill was September of 2023. So we're already in an over one year extension of that bill that has expired. And in addition, given that it has been so long, there are significant issues that really just need to be updated. One of those is commodity reference prices. You know, those were last updated in the 2014 Farm Bill. So they really need some significant attention on that matter. We do expect that the House will move very quickly or try to move very quickly on the Farm Bill. If it does happen to go into the 119th Congress, you know, the House committee chairman, GT Thompson, has already targeted Q1 for reauthorization. So we do know that there will continue to be significant movement, but there are still major fights over the IRA money as it relates to conservation and SNAP cuts. And, you know, there's a lot that has to be negotiated still to get this legislation done.

You know, moving forward, just thinking about committee leadership on the Senate side, with the new chairman coming in as Republicans have taken over the chamber, and Boozman will be the chair of the Senate Agriculture Committee. We're still expecting GT Thompson to chair the House Agriculture Committee. In fact, I think the House leadership is doing those interviews as we speak. And so we should see that announcement and the House Agriculture Committee get populated with its members, I think either this week or next week. So that's coming. You know, on the Democratic side, in the Senate, Senator Klobuchar is going to be the ranking member in the Senate. Obviously, Senator Stabenow, who was chairing that committee, is retired from the Senate. So we'll have new leadership there. And on the House side, you know, some Democrats are trying to do new leadership for the ranking member slot. Representatives Costa and Craig are challenging Congressman Scott, and that decision could come as early as next week. So we will see a little bit of shakeup as it relates to leadership on the Agriculture Committees. In addition, there are, I think, nearly 60 new House members that will be sworn in on January 3. And so I do think we'll see some shakeup on members. So there'll be a lot of education that needs to occur. Certainly getting some of these freshmen who may not have been involved too heavily in Congress or politics, you know, maybe state legislatures in a previous position. Just trying to get them up to speed on this massive bill. And how much is at stake in getting it reauthorized? And how about I turn it over to you real quick for maybe some top priorities for the Republicans? And then I'm happy to talk again about budget reconciliation and disaster spending.

Pete Tabor: Thanks, Liz. Yeah, there's a couple of points in terms of priorities coming up for the Republicans who will be in control of the committees in both chambers. Really quickly, shifting or going back to that discussion of Democratic leadership, the ranking member position in the House Agriculture Committee. One factor that has come up in conversations I've been privy to is this idea that Senator Klobuchar from Minnesota as the ranking member in the Senate, that means that Minnesota's well represented there in a leadership position. There might be interest in the House on the Democratic side in looking at a more diverse representation of leadership. California, I don't think, has had a leadership position there for some years. So it's not necessarily a strike against anyone or for anyone, but it's a factor to consider. We anticipate that this, as you said, Liz, these decisions can be coming in the next couple of weeks. In terms of priorities, you referenced, Liz, the reference price issue. Not to use that word too many times, but it is a big deal. This has been something that there is general bipartisan agreement on, and that is updating the commodity reference prices. And what that means is that there is relief for farmers when commodity prices dip below a certain level. What this means is that since those prices haven't been updated since the 2014 Farm Bill, they are woefully outdated. And so those reference prices don't kick in until they drop to a very low level compared to what the current market will bear. There is also bipartisan support for increasing exports or supporting or facilitating increased exports through foreign market development assistance. So there's the Market Access Program and the Foreign Market Development Program that USDA manages. And Republicans and Democrats have been for many years talking about how those programs are a significant return on investment, but those numbers, the funding for those has been static for many years. And the proposals put forth, you know, the one that was voted on in the House Agriculture Committee in May and Senator Stabenow's proposal, released a couple of weeks ago, they do increase funding for those programs. And as we'll talk about when we talk about tariffs and trade, that's a big deal for farmers who rely on export markets for a lot of their growth.

Another Republican priority will be limiting the growth of SNAP benefits or Supplemental Nutrition Assistance Program benefits. That has been something that we and, Liz, I think you'll talk about this a little bit in terms of reconciliation, but the SNAP benefits, the nutrition title in the Farm Bill accounts for roughly 82 percent of the Farm Bill budget over its life, whether it's a five-year or 10-year calculation. And Republicans have a priority of reining that growth in. And then as Senator Boozman and others and GT Thompson have said, you know, putting the farm back in the Farm Bill. So we're going to see how that shakes out.

And finally, that climate guardrails piece that you mentioned is a big deal. Obviously, Inflation Reduction Act money in the order of like $20 billion went to USDA for, quote unquote, "climate smart agriculture programs," which are voluntary and quite popular among farmers in the United States, but Republicans have made clear that the money remaining, I think is in an order of $14 billion or so, could go into the conservation title of the Farm Bill, which makes it permanent. But Republicans want to take the climate guardrails off so that money can be more freely spent. And Democrats have been resisting that, saying, this was legislation that was passed and signed into law, those guardrails should remain in place. We will see, because that is not at all decided in terms of what happens. And obviously, Republicans holding the pen in both the House and the Senate and in the White House, they'll have a definite say on this. Liz, you want to talk a little bit about budget reconciliation, the big budgetary aspects of the Farm Bill.

Liz Craddock: Yeah, happy to, Peter. You know, it's interesting on the $20 billion from the conservation funding that was provided as part of the IRA, you know, the Republicans have signaled that they would like to essentially use that in the baseline of the Farm Bill, count that sort of to the budgetary consideration. Meaning that the current bill on the House side, the CBO, the Congressional Budget Office, scored the bill originally at $33 billion. So that would be the score or the cost that Congress would have to offset if the bill in its current form were enacted. Now, I believe that CBO has scaled back that score of $33 billion down a little, so it may be closer to $28, $27 billion. But still, at the end of the day, that that funding does not include the $14 billion that is remaining in the conservation funding from the IRA. So if the current Farm Bill were to be enacted, then I'm not quite sure what would happen with that $14 billion as far as when it comes to budget reconciliation. We've heard, I think, very loud and clear that the House Republicans plan to move very quickly with a couple of different budget reconciliation measures. But I think there is a consideration on timing of the Farm Bill as far as budget reconciliation goes, in the sense that if House Republicans are planning on using a repeal, either full scale of the IRA, which I don't think is an actual possibility, or maybe a more nuanced approach, if they're planning on repealing the conservation funding and using that as part of their budget reconciliation process, then I do think that that's going to have a significant impact on the House Republican Farm Bill proposal. So there are definitely some considerations there that need to be addressed as far as timing and sequencing of these measures to ensure that, you know, that if there is an intention to try and recoup some of those dollars for that process, that they're able to do that. So, you know, we'll be watching that, I think, very carefully as that moves forward.

You know, I think the last remaining item that Congress has to do, perhaps in this lame duck Congress, is pass Disaster Supplemental Assistance. You know, obviously, I think the headliners of the hurricanes that have hit, you know, the southeast part of the country, we've all seen the destruction that occurred in North Carolina. President Biden sent over a roughly $100 billion request for disaster assistance, and about $24 billion of that is for farmers. We've heard from the House Freedom Caucus that they do not want Disaster Supplemental to pass without it being paid for. So not adding to our current debt. So we will see how this continues to move forward, but if it passes in its current form, then that's about $24 billion again for farmers to help them post these disasters. And they're not just the disasters, you know, the hurricanes, but there's also, you know, tornadoes that happen across the country and there's significant damage from wildfires, etc. So there's a lot of need out there for the rural agriculture communities, and hopefully disaster assistance can get passed. The last time Congress was able to pass a disaster supplemental package like this was December of '22. So I think a lot of the financing over at USDA and other agencies is really starting to run dry, and we're hopeful that Congress can do something this year and not delay it into the 119th Congress. With that, Pete, I think that that wraps up sort of what we're expecting on the Farm Bill and sort of congressional funds during this lame duck. But why don't I turn it back over to you to talk about what we can potentially expect from USDA leadership and other agencies under the new Trump administration.

Pete Tabor: Yeah. Thanks, Liz. Definitely a lot to watch with respect to the Farm Bill, both in the next couple of weeks and then in the new year. But all these policies are put in place and carried out by people. And we've got some names as you've all seen, with respect to President-Elect Trump naming Brooke Rollins to serve as his Agriculture Secretary. And so this nomination or this appointment was, I won't say it was a surprise, but there were a lot of names that were discussed all the way up to the formal announcement that were perhaps more household names in the agriculture and food space. But Brooke Rollins definitely has very close ties to President Trump from his first term. She served on his Economic Advisory Council. I think she was acting director of his Domestic Policy Council and also the director of this Office of American Innovation. So she's got a lot of time, I guess you could say, deeply embedded in the White House during President Trump's first term. And she also served as his Assistant for Strategic Initiatives. Following Trump's presidency, she went and co-founded and became the CEO of the America First Policy Institute, which has gotten a lot of press in recent months because it was busy, you know, when it was formed in 2021. It really set about formulating a lot of policy with an expected return of Donald Trump to the White House. And so I think that work over the past several years really put Brooke Rollins in a position to return in some capacity to a second Trump administration. From an agriculture standpoint, Brooke Rollins is a Texan. She got her  bachelor's degree in agricultural development, I believe, from Texas A&M. And she has a law degree as well from the University of Texas. And so there are, in terms of folks who've worked with her now are, you know, she's viewed perhaps, and I'm saying this because I think it's a contrast with the other person in the mix here at this high level, and that is RFK Jr., Brooke Rollins might be seen as more of a supporter of conventional agriculture or, you know, has a deeper understanding of the role that, for example, all the inputs like fertilizer and pesticides might play in agricultural production. And so that piece is, I think, important going forward.

Shifting gears slightly, we look at Robert F. Kennedy Jr., who President-Elect Trump named as his Secretary of Health and Human Services. He's got very well documented views on his skepticism of pesticides, of ultra processed foods, which is a very nebulous category, but foods that are very shelf stable for a very long time. And he's attributed some of those products or their attributes to obesity and chronic disease issues here in the United States and around the world, perhaps. But the interesting thing to note here, one is how will RFK Jr. overseeing HHS, which FDA, the Food and Drug Administration, is part of HHS, how will that dynamic play out between RFK and his role at HHS along with Brooke Rollins and her role at USDA? The interesting thing to note is that with respect to nutrition, USDA really, really has the ball. The dietary guidelines that are put out are largely put out under the tent of USDA. Not to say that HHS doesn't have any role there, but it is really USDA's purview. Similarly with pesticides, the Environmental Protection Agency is the main U.S. agency reviewing and approving pesticides for use on food and food crops. So it'll be interesting to see how all of this plays out.

One thing, we'll get into this later, but I do want to touch on this from a policy standpoint and, to a certain extent a people standpoint, is USDA, during the first Trump Administration, really had to address issues created by the tariffs that then-President Trump imposed on a range of imports and the retaliation that that sparked from our trading partners. At that time, USDA Secretary Perdue used some of the funds available to the department, to him, to compensate farmers who had been hurt by these retaliatory tariffs. But one of the things that the USDA secretary is going to have to deal with is, one, this tariff issue, which we'll dive into a little bit more in a little bit more detail. But more importantly, we've been hearing and I think, Liz, you refer to it, you know, there's disaster assistance, whether you want to call it climate change or weather events. But there are factors impacting farmers ability to grow crops, harvest crops, etc. There's input costs. There's the labor piece that we're going to talk about in a couple of minutes here as well. Fertilizer, for example, is an important one. U.S. farmers import 20 percent of the fertilizer that's used in the United States. And that fertilizer, if you just look at corn and wheat, for example, it accounts for slightly more than a third of operating costs for corn and wheat production. So the incoming USDA Secretary is going to have a lot of farmers and stakeholder groups really advocating for some forms of relief because these input cost pressures, weather events or climate change, labor factors are really making farming and ranching, they're really making it tough. So the incoming secretary is going to have a lot on her plate, and we will see how that process unfolds. But it's going to be very interesting.

With that, I think it's important to shift to that tariff discussion. And I'll keep this brief because I think it's territory that's been covered quite well. You know, there's been a lot of talk recently about tariffs, principally because candidate Trump campaigned on promises to hike tariffs across the board on some of our closest trading partners, on some of our rivals. And again, so this plays out and the things I'll discuss here in a minute relate to some of the people who we expect will be carrying out some of these policies and their impact on agriculture and then in the policies themselves and also a bit about our trading partners. So first at USTR, the U.S. Trade Representative's office. President-Elect Trump announced that Jamieson Greer will be his service as USTR. Now, Jamieson Greer was Bob Lighthizer's chief of staff when Bob Lighthizer was the U.S. Trade Representative during President Trump's first term. So you can expect that he's, if you want to say the term cut from the same cloth, he understands and appreciates the role that tariffs can play and will be likely supporting or executing on a plan that President Trump announces or wants to put in place in terms of imposing tariffs, you know, either across the board or on specific trading partners. But there is this fundamental shift that we've seen from the Trump Administration through the Biden Administration keeping to it, and not only putting tariffs in place, which Trump did, but keeping them in place, which the Biden Administration has done.

The other piece here is that Peter Navarro was very recently, I think a week or two ago, announced as the senior trade and manufacturing counsel. So he'll have a role in the White House. He also had a very prominent role in President Trump's first administration. For background, he's a UC Irvine economics professor and an author. And my understanding is that in 2015 or 2016, a Trump campaign aide heard Peter Navarro speaking in an interview on trade policy and was intrigued enough by what Peter Navarro said to say, you know, we've got to start a conversation with him. And that led to him joining the Trump Administration.

The other piece I want to quickly mention is that Howard Lutnick was named as the Secretary of Commerce, and in that announcement, President-Elect Trump said that Howard Lutnick would have oversight over tariffs and USTR, which prompted some questions among folks with respect to USTR's independence or their role. Because USTR is actually part of the White House, it's part of the executive office of the president. So it remains to be seen how that will play out, what Jamison Greer's role will be, what level of independence he'll have from Howard Lutnick and the Department of Commerce.

Quickly when we talk about these tariffs that Trump has announced, one of the things that we know from President Trump's first administration, his first term in office, is that whatever leverage we feel or the United States feels it has, it's going to use in these negotiations. So these tariff announcements a couple of weeks ago of 25 percent tariffs on Canada and Mexico, really citing both immigration and fentanyl as concerns. The underlying market dynamics or market realities there are, that 76 percent of Canada's exports come to the United States. That figure is 80 percent for Mexican exports. So those countries under USMCA and just writ large because of the borders we share, they rely heavily on the U.S. market. And so the Trump Administration, I believe, is going to be seeking to use that as an advantage ahead of the USMCA review, which we'll get to in a few minutes.

But the other piece is that U.S. farmers and ranchers really rely on exports, even though we've been running an agriculture trade deficit in recent years. Historically, we've run agricultural trade surpluses. We produce more than we consume in the United States, so farmers and ranchers here need those export markets. And I believe it's fair to say that they were some somewhat frustrated with the Biden Administration and the lack of trade agreements that were inked in these four years that would secure increased market access for U.S. exports.

So those questions are outstanding in terms of, if these tariffs go in place or are put in place, what will our trading partners do? There's already been talk about retaliation. What form will that retaliation take? If you just use history as a guide, we're looking at retaliation against U.S. agriculture. I think our trading partners understand the congressional map, they understand where our exports come from, whether it's soybeans or pork or beef or corn. And they will apply pressure accordingly to ensure that members of Congress understand the effect that these tariffs are having. And we'll see how that plays out again. But I think that this is principally done as the effort to bring those countries, whether they're close trading partners or rivals, to the negotiating table to secure concessions from those countries. I'll close really quickly by saying these tariff factors are significant, but there's other factors contributing to this relative drop in U.S. food and agriculture exports. I refer to that, and that is that we're looking at a strong dollar, we've had a strong dollar for some time. It's great when we're buying products from abroad, but it can make our exports more expensive, including our ag exports. Also, and Liz, you refer to this, I mean, the weather events have in some form contributed to lower production and lower yields for certain commodities. Beef production is cyclical, and we're in what you could call a trough now in terms of supply. So there's less to export or the prices for those exports are going to be higher. And it can't be really denied that climate change and weather events have impacted farmer decisions. That disaster assistance you referred to Liz is significant. And then finally, increased shipping costs both, you know, during the pandemic and after. Those shipping costs have increased the overall costs for U.S. exports of food and ag products. So that affects our competitiveness as well. I think with that, Liz, I'm going to kick it back to you to talk a little bit about a really key topic for U.S. agriculture, and that is questions around labor.

Liz Craddock: Yeah. Thanks, Pete, definitely want to connect and get through the labor piece on mass deportations, but before I get there, I just wanted to step back for a moment and, you know, you had rolled through what we might expect as far as USDA leadership, leadership at HHS and USTR. But their first step, these nominees in the process, is getting Senate confirmed. And, you know, that process will probably move pretty swiftly, I would expect, for at least two out of the three nominees that I just mentioned. But at the end of the day, each committee of jurisdiction in the Senate will hold a hearing where they will invite the nominee in. At this point, you know, each senator who serves on that committee will have an opportunity to ask questions of importance. These are usually very state-specific questions to the industries within those states. So obviously, when it comes to agriculture, you know, the agriculture community and network and industry here in D.C., they're going to be ready to go with lots of questions to ask nominee Rollins on sort of her policies and what she may may lead on if she is Senate confirmed to be USDA Secretary. So there's definitely a process there.

If there are significant questions that your industry has or wants to try to get on the record from the nominee in advancement of them being confirmed, you know, this is a great opportunity to try and get those questions asked and answered. Not only will there be the live hearing, but there's usually also an opportunity to ask questions for the record. Each senator will then, after the hearing, send questions that they did not get to ask live to the nominee for answering. Those take, you know, anywhere depending on the questions, you know, seven to 14 days to come back and there's an opportunity to get, again, each nominee on the record for those questions from senators before they are confirmed. So I am expecting a lot of Trump's nominations to be swiftly confirmed in the Senate. But there still is the process of advice and consent, and that means that there will be committee hearings on all of the nominees before they move through in the Senate.

Shifting back over to the labor discussion, obviously, I think everybody who's listening has heard, you know, Trump mentioned that he continues to press forward on mass deportations on day one, on January 20. Just this weekend, he was again reiterating that plan on the Sunday news shows. So I think we can fully expect that there will be some movement in that direction on day one. He has signaled that he will implement this mass deportation of undocumented immigrants in an expediated removal at mass migrant camps. And he has plans to deploy the U.S. military to assist in this effort. So there's definitely a lot of attention and a lot of potential anxiety related to this for day one, you know and I think that's because, you know, especially from the agriculture industry, relies heavily on undocumented migrant workers and foreign workers on work visas. You know, nearly half of the nation's approximately 2 million farm workers lack legal status, according to the Labor and Agriculture Departments. You know, without farm workers out there in the fields helping harvest the crop, that potentially means this crop is going to be left in the fields and may not actually make it to market. If it doesn't make it to market, then obviously can't be sold, and if there's a lack of supply for the existing demand, you know, that's just another potential opportunity for prices to continue to increase in this country. So I think it's really important that we have some clarity from the incoming administration on this and how our agriculture community is going to be able to have the labor workforce that it needs to harvest its crop. You know, the Center for American Progress estimates that mass deportations could cost the U.S. economy nearly $400 billion to $600 billion annually as businesses and the ag community and other various industries struggle to fill jobs. So obviously, this is a big, big item for the agriculture community. Again, you know, we're going to have opportunities in the Senate to ask some serious questions on this potential plan and how it will impact the agriculture community in early January as the Senate is processing these nominations. You know, I think there's going to be potentially a lot of backlash not only from Democrats, but also the Republican side, whose agriculture communities and food operators seriously rely on this workforce.

So labor shortages in this arena can really hamper the agriculture community, and I think this timing, and especially if there's going to be an increase in tariffs, etc., could really have some serious harm to the sector. So a lot coming as it relates to labor issues, and I fully expect that Congress will be looking at this very carefully in the 119th next year, so more on that. But, you know, we've talked a lot about tariffs and labor, and as it relates to labor, you know, obviously we have a lot of workers coming in from our southern border, and I fully expect that incoming President Trump will be using the immigration issue to his full advantage as it relates to trading issues with our southern neighbor in Mexico and with our northern neighbor in Canada. So I do think that with this upcoming USMCA review that we're expecting in 2026, you know, we're already starting to see the groundwork for that. But I do think that there will be a lot of potential negotiation points as we move forward with that review. So I know you're close to those discussions, so why don't I turn it back over to you to talk a little bit more about USMCA review.

Pete Tabor: Thanks, Liz. Yeah, USMCA review doesn't officially start until July 1 of 2026, but a lot has happened that is impacting the run up, the preparation for and even the tone of that USMCA review. And a lot's going to change over the next year and a half. But here's what we know. As I said, you know, USMCA review is set for July of 2026, and that date is basically according to what was agreed when the USMCA was negotiated and then ratified and signed into law. It entered into force in July of 2020. And it was stipulated that the parties would have to conduct a review in year six, that the agreement terminates after 16 years if the parties don't agree to renew it. So this is the first review under the USMCA, which replaced NAFTA. And then I guess you could call it the shot across the bow — I don't want to be too hyperbolic here — but, you know, for President-Elect Trump to announce 25 percent tariffs on Canada and Mexico, our USMCA partners, in the run up to the USMCA review does a little bit, as I said, from a tone standpoint, does put those countries, you know, on notice, especially when you consider that fully two thirds, three quarters of their exports go to the United States. It's clear that President Trump, when he takes office in a month or so, will be using whatever leverage he can with all our trading partners, but specifically with Canada and Mexico in this context, to, you know, either address immigration issues, there's a China component that I'll talk about, but it's really an interesting time to be working in the trade space because of all that's going on.

So what we can see from a USMCA review standpoint is — and this is where I think hopefully we can play a role for our clients in providing input to the administration and to Congress — the way this process is going to play out is we're going to see the USTR, U.S. Trade Representative's office, soliciting input from U.S. dealers in advance of that USMCA review, which is the three parties sitting down and deciding to either renew the agreement without any changes, make changes, and then agree to those changes, or a party can give six months written notice to the other parties that it intends to withdraw. And if the United States does that then USMCA goes away. But the USTR process will be to solicit input pretty much over the course of the year, but it kicks into high gear in the fall because I believe the deadline under the law that enacts USMCA for the United States is that on or around October 1, the input must be sought. We would advise our clients in the agriculture and food space to start talking to USTR and to USTA and to members of Congress as soon as possible in the new year to share priorities, share concerns and to get that input in, I don't want to say early and often, but strategically so that that messaging is part of ultimately the messaging that USTR delivers in the form of recommendations to Congress. Because the October 1 is the deadline for USTR to receive input from stakeholders. And then January 1 of 2026 is the deadline for USTR to deliver recommendations to Congress on the USMCA review, basically saying this is going to be our strategy, these are going to be our objectives in USMCA review. We know that those steps, Canada and Mexico are well underway, initiating their process to collect stakeholder input and develop their positions. And then it'll be very interesting to see how the Trump policies with respect to tariffs, etc., play out when he's actually in office, because right now these announcements are very concerning for many stakeholders, obviously very concerning for Canada and Mexico, but they are statements by an incoming president. And we'll see how that plays out once President-Elect Trump is President Trump.

And so I think it's going to be incumbent upon food and agriculture stakeholders to really engage effectively with USTR, with USTA, with your key members of Congress, and we can help with all of that, in terms of the relationships we've got, to deliver really strong messages about what the priorities are for USMCA. One thing I want to touch on is that there is discussion about the fact that these tariffs that President-Elect Trump has announced are violative of the United States' obligations under USMCA. That may well be the case. The interesting factor there is that Mexico is also, you know, for anyone who does this work for a living, you know that Mexico as well, has been accused of violating USMCA with some of its policies and approaches and policies with respect to energy, with respect to judicial reform. And so there's a lot of uncertainty there that will have to play out over the next several months. And so we will be watching this very closely, will be interacting with a lot of the stakeholders and our clients to ensure that our clients' positions are well represented in the run up to the USMCA review, which kicks off, it sounds like a distant date, July 1 of 2026, but it'll be here before you know it. And so with that, I think, you know, we've covered several topics and I think we've touched on it a little bit, but Liz, I want you to talk about, if you can, a little bit about the role of our legislative branch and specifically 119th Congress coming up, the makeup of that Congress and what we can expect in terms of their role and their impact on some of these issues we've covered over the past several minutes.

Liz Craddock: Yeah. So thanks Pete, I was listening to you, you know, talk about sort of advocating at USTR on issues that are important for companies in the industry. And I think that's exactly right. I also think it's going to be really important to do that in the 119th Congress. We've got nearly 60 new members on the House side. So that's a lot of new faces that need to be brought up to speed on certain issues and, you know, sort of the status quo and where they stand. So there's a lot of education that needs to be done on that front. You know, we're not seeing too much change as far as Republican leadership in the House. You're still going to have Speaker Johnson and Scalise sort of running the body over there. But we are going to have a very thin majority, just a three-seat majority for House Republicans. They lost a seat in the election. So they're going to need every one of their members in every one of their caucus supporting their legislation as it moves through to have the majority vote in the House. So, you know, I think there's just going to be a lot of work that's going to be needed on the ground to get those new 60 members up to speed.

You know, on the Senate side, obviously, the Republicans picked up the Senate. So we are seeing a shift in that chamber. We are going to have a new majority leader in Senator Thune who will be taking over for the Republicans. Senator Mitch McConnell has stepped down from that role, although he will still be serving in the 119th Congress. So we are going to see a leadership change over there. It is, you know, 53 seats to 47. So a three-seat majority for Senate Republicans. Obviously, it's not the 60 to 60 threshold that you need to overcome a filibuster. And there are 10 new members of the United States Senate. So, again, education will be needed for all of these members and getting them caught up to speed and working through budget reconciliation and other agriculture appropriations and other issues like the Farm Bill that will definitely need attention in the first six to nine months of the next Congress. So it's a lot moving, a lot that's going to move fast, in addition to all the nominations that we talked about earlier: tariffs, deportation, etc. So there's a lot happening for the agriculture sector. And we'll be watching and helping provide advice to clients and helping being sort of the eyes and ears in D.C., as I like to say. But with that, Pete, I think that we've taken up almost nearly an hour here. So hopefully a lot of good information for our listeners who stuck with us for this long. And it's been a great opportunity to sort of download all of this information.

Pete Tabor: Yeah. Liz, thanks for joining me on this. It's been really fun. It's going to be an eventful two weeks. We'll see how things pan out with respect to the continuing resolution, Farm Bill extension, etc. And a very interesting 2025. We invite our clients and listeners to contact us with questions and to begin planning for 2025. Thanks, everybody, for joining us and happy holidays, and we will see you next time.