With fertilizer prices surging after the Strait of Hormuz was blocked in the wake of the Iran war, US President Donald Trump has declared a national emergency and decided to temporarily suspend tariffs on phosphate fertilizer from Morocco, the world's largest phosphate exporter, to support farmers. Should fertilizer prices remain elevated even after the war ends, production of both agricultural goods and livestock that depend on feed could be choked off, potentially shaking food prices on tables worldwide.
In a proclamation Monday, Trump said, "Under Section 318 of the tariff law, the supply of fertilizer sufficient to meet US agricultural needs is being threatened, and I declare a national emergency." According to the White House, tariffs on Moroccan phosphate will be suspended for eight months, and if the emergency ends earlier, the suspension will apply until that point. Existing Moroccan phosphate fertilizer had been subject to a countervailing duty of up to 16.8 percent.
Declarations of national emergency have occurred frequently under the US political system. However, this is the first time fertilizer tariffs have been suspended on the basis of Section 318 of the tariff law, which permits duty-free imports of emergency relief supplies.
US farmers have been struggling with surging fertilizer prices since the Iran war, as 33 percent of the world's fertilizer is transported through the Strait of Hormuz. In particular, China, a major exporter, also halted fertilizer exports, disrupting supplies of phosphate rock, sulfur and ammonia essential to phosphate fertilizer. According to a survey by the American Farm Bureau Federation, about 70 percent of US farmers said they could not afford to purchase fertilizer at needed levels, and Mosaic, the largest US fertilizer producer, suspended operations at a phosphate plant in Brazil in April this year.
Some analysts suggest that Trump, ahead of the midterm elections, has moved to "save farmers," a core support base. On Tuesday, Trump asked Congress to approve an additional budget bill of $11 billion (about 17 trillion won) to ease damage to farmers from the Iran war.
