Rabat – The US Heritage Foundation has spoken out against “fertilizer taxes” on Morocco’s phosphate exports, calling on Congress to reverse the duties. The influential think tank in Washington DC, on April 5, described the duties as “fertilizer taxes” that will hurt US farmers.
The Heritage Foundation published its commentary on a March 12 ruling by the US International Trade Commission (USITC) to impose import duties on Morocco’s phosphate products. The USITC ruled that Morocco and Russia “subsidize” its phosphate industry, making US phosphates less competitive.
The ruling favored US phosphate giant Mosaic which actively lobbied for the issue to be considered by US authorities. Yet the Heritage Foundation argues that claims of harm on the US phosphate company are “questionable,” and harmful, as Mosaic is “often unable to meet US demand.”
Tax on farmers
The Heritage Foundation’s main problem with the USITC ruling consists of the effect of the new duties on imported phosphates from Morocco. Dubbed “fertilizer taxes” the duties would hurt local agriculture and consumers according to the influential group.
Duties on Morocco’s popular export product would make fertilizer more expensive for US farmers, adding a possible $1-1.5 billion dollars in costs in the coming year. Those costs come at a time when farmers are already struggling amid an economic downturn, with costs likely to increase prices for consumers.
The consumers that would be worst hit are low-income households in the US, according to the Heritage Foundation.
The think tank highlighted that “these duties would be regressive, impacting low-income households the most; the lowest-income households spend a greater share of their disposable income on food (36%) compared to the highest-income households (8%).”
Possible reversal by congress
In order to avoid unnecessary costs for farmers and consumers, the Heritage Foundation is calling on the US Congress to reverse the USITC decision. “Congress needs to correct this situation, otherwise these harmful duties will be in place for at least five years,” the group warned.
The Heritage Foundation is now calling on both congress and the administration of US President Joe Biden to stand up for farmers and consumers amid an already difficult economic context.
“At a minimum, legislators should review the situation and carefully consider whether Mosaic is being unfairly harmed by the phosphate fertilizer imports,” the foundation advised.
Import duties on Morocco’s phosphate would limit freedom, increase government intervention, and inhibit agricultural trade, the think tank predicts. The Heritage Foundation is asking congress to “take into account the impact that the “fertilizer taxes” will have on farmers and American families, especially in light of the pandemic.
“After so much uncertainty, Americans deserve no less,” the group concluded.