Punitive Biden Phosphate Tariff on Morocco Hurts Farmers, Grocery Consumers

The United States under the Biden Administration’s Department of Commerce is moving once again to raise tariffs on phosphate fertilizers from Morocco just months after announcing a large cut in duties (from 19.97% to 2.12% in November 2023).

By the way: At the same time as the Commerce Department cut Moroccan phosphate tariffs last November, it increased the countervailing duty rate for Russian producer PhosAgro from 9.19% to 28.50%.

Now, the Commerce Department says that it will raise tariffs on phosphate imports from Morocco, which is home to 70% of the world’s phosphate reserves, from 2.12% to 14.21%. It is also moving to lower duties on Russian phosphate fertilizer from 28.5% to 18.83%.

The proposed new rates will go into effect in November 2024 and apply retroactively to 2022 imports. The changes come after Florida-based fertilizer company Mosaic petitioned the agency for action, saying tariffs are needed to create a competitive marketplace.

OCP, a state-owned entity and the largest Moroccan phosphate fertilizer manufacturer, stopped shipments to the United States as a result of the 2021 tariffs. The company resumed shipments once the tariffs were lowered. Presumably, OCP will once again stop shipping phosphate to the United States.

Phosphate fertilizer is used on basically every crop from corn and wheat to vegetables to fruits and citrus to cotton.

With such volatility in the phosphate fertilizer market, it comes as no surprise that overall grocery prices have increased more than 21% since the beginning of 2021. With an incoherently outlandish tariff regimen regarding Moroccan phosphates, the Biden Administration is causing artificial volatility in the ag input market and thus also in the supermarket.

What motivates the Biden Administration? It seems suspiciously political.

Most of the U.S. phosphate production comes from Florida and North Carolina, which happen to have been hotly contested in recent presidential elections. Here we are, coming up on another presidential election, and suddenly the Biden Administration is enacting trade policies that will benefit a bit Florida-based company. At the same time, tariffs on Morocco harm American farmers, who reside largely in conservative states with Republican representation in Congress.

Suspicious, indeed, and also unconscionable.

The production of (affordable) food is not just an economic issue but also a moral issue. About 9.2% of the world’s population, or about 735 million people, were undernourished in 2022, according to the United Nations, which was substantially higher than in 2019, when 7.9% of the population was undernourished. It could be considered a regression in human development when the ability to produce more and less expensive food exists but is not exercised. The high cost of ag inputs, including phosphate fertilizers, is partly to blame.

For all of these reasons, TAPP is calling on the Biden Administration to abandon its efforts to impose punitive tariffs on Moroccan phosphates and instead to help American farmers and grocery consumers through lowering the costs of producing food domestically.