A Gift To Cronies, But A Blow To Farmers

President Trump returned to office facing an enormous cleanup job. He and his administration have moved quickly to restore economic sanity. But one especially destructive Biden-era policy remains in place—and at the worst possible moment—a hidden farm-and-food tax embedded in the price of fertilizer.

This tax is bad enough on its own. But Iran’s growing threat to global trade has made it far more dangerous. A huge share of the world’s fertilizer supply moves through the Strait of Hormuz. This means that when Iran rattles the region, attacks shipping or helps to destabilize the Middle East, fertilizer prices feel the shock almost immediately. Americans notice oil spikes at the gas pump. What they don’t immediately see is the coming surge in farm costs—and then food costs. But farmers see it; they live it.

Fertilizer isn’t some secondary expense. It’s one of the most essential inputs in modern agriculture. When fertilizer prices rise, the entire farming economy is hit. Margins shrink, production costs soar, competitiveness falls and, eventually, consumers pay more at the grocery store.

This is where Biden’s policy blunder comes in. The Biden administration imposed countervailing duties on phosphate fertilizer imports—particularly from Morocco—under the usual Washington pretense of helping a domestic industry. In reality, these duties functioned as a tax on American agriculture. The U.S. doesn’t produce enough phosphate domestically to meet demand. So when Washington taxes imported supplies, it’s not punishing foreign producers nearly as much as it’s punishing U.S. farmers.

This should be obvious. But in Washington, obvious truths are often ignored when powerful corporate interests are whispering in the right ears.

The results have been exactly what basic economics predicts: higher fertilizer prices, tighter supply, greater dependence on fewer producers and windfall gains for a narrow slice of a domestic industry. In other words, classic crony capitalism. The Biden administration dressed it up as trade policy, but it was really a government-assisted wealth transfer—from farmers and consumers to politically connected special interests. That’s unacceptable in normal times, but in a moment of geopolitical risk, it’s reckless.

Iran’s ability to disrupt trade routes has increased the cost and uncertainty surrounding critical agricultural imports. This should have triggered an urgent response from Washington to expand supply and lower barriers. Instead, America’s farmers are still carrying the burden of a Biden-era import tax that makes them less competitive and more exposed.

President Trump has made affordability a central goal of his administration. But, if the White House wants to bring down food prices and strengthen rural America, it must go beyond temporary relief payments. It must eliminate the policies that are causing the pain in the first place. That begins with ending the phosphate duties.

The Department of Commerce’s review of these import taxes presents the Trump Administration with an ideal opportunity: Let them expire, don’t renew them. Don’t allow Biden’s corporate handouts to become Trump’s problem.

This shouldn’t be a hard call. If we want strong farm families, competitive agricultural exports and lower food costs, America needs abundant access to affordable fertilizer. That means more supply, not less; more competition, not less; more market freedom, not less.

Supporters of these duties will wrap themselves in the language of patriotism and “fair trade.” Ignore them. What they’re really defending is protectionism for the favored few at the expense of the productive many. Farmers don’t need Washington making things worse.

Food security is national security. A nation that weakens its farmers while foreign adversaries threaten global supply lines is behaving foolishly. The U.S. should be reinforcing its agricultural base, not taxing it.

President Trump has a chance to strike a clean blow against Biden’s failed economic legacy. Scrap this hidden farm-and-food tax. Open up the fertilizer supply, which will lower costs and strengthen U.S. agriculture. Send a clear message that this administration stands with farmers, consumers and free enterprise, not with the crony interests that profited from the Biden administration’s mistakes.

That would be smart policy. More importantly, it would be sound economics.