Key Takeaways:
- U.S. farmers face lower crop prices due to President Trump’s global tariffs.
- Tariffs on China and other countries are causing retaliatory measures.
- Farmers fear losing key foreign markets, especially China.
- Past trade disputes already cost U.S. agriculture billions.
- Farmers are struggling to find new markets as global tensions rise.
U.S. Farmers Caught in the Crossfire of Trump’s Tariff War
President Donald Trump’s new global tariffs, which took effect this weekend, have left U.S. farmers worrying about their profits. Instead of a profitable year, farmers are now dealing with falling crop prices and the fear of losing even more ground in foreign markets.
How the Tariffs Are Hurting U.S. Farmers
Farmers like Jim Martin, a fifth-generation Illinois farmer growing soybeans and corn, are feeling the pain. “We’re already getting below break-even at the current time,” Martin said. He explained that while farmers knew the tariffs were coming, they’re anxious about how the situation will be resolved.
The tariffs, which started at a 10% baseline rate for most U.S. trading partners (excluding Mexico and Canada), are set to increase for dozens of economies, including China, the European Union, and India, starting Wednesday. China, in particular, will face a 34% duty on its products, adding to an earlier 20% levy. In response, China announced its own 34% tariff on American goods, further hurting U.S. farmers’ competitiveness.
The China Problem: A Major Market at Risk
China is the third-largest buyer of U.S. farm goods, behind only Canada and Mexico. Last year, China spent $24.7 billion on U.S. agriculture, including soybeans, corn, chicken, and beef. However, the U.S. Department of Agriculture reported that China’s purchases dropped 15% in 2023 due to rising competition from South America.
Michael Slattery, a Wisconsin farmer growing corn, soybeans, and wheat, expressed his concerns. “There is less incentive for them to purchase U.S. soybeans. It is cheaper to get them from Brazil by far,” he said. Slattery believes Chinese buyers will reduce their purchases even further, making it harder for U.S. farmers to compete.
Finding New Markets Is Hard
During Trump’s first presidency, China was the main target of tariffs, and it was also the only country retaliating. Now, with tariffs targeting nearly all U.S. trading partners, farmers are finding it much harder to find new markets.
Christopher Barrett, a Cornell University professor specializing in agricultural economics, warned that losing the Chinese market is a big deal. “It’s expensive to find other buyers,” he said. “More than 20% of farm income comes from exports, and farmers rely on imports for crucial supplies like fertilizer and specialized tools.”
Financial Pressure on Farmers
The American Farm Bureau Federation recently warned that tariffs will drive up the cost of critical supplies for farmers. At the same time, retaliatory tariffs will make American-grown products more expensive globally. This double blow could have long-term consequences for the farming industry.
During the previous tariff war, retaliatory tariffs cost U.S. agriculture over $27 billion in export losses between 2018 and 2019. While the government provided $23 billion in aid to farmers in 2018 and 2019, many farmers, including Martin, see this as a temporary fix. “It’s like putting a band-aid on a long-term problem,” he said.
Broader Economic Impacts
The International Dairy Foods Association also warned that “broad and prolonged tariffs” on top trading partners and growing markets risk undermining billions in investments made to meet global demand.
Farmers are bracing for losses this year and next. Slattery, for example, has tried to sell as much of his soybeans and corn as possible ahead of time. “I’ve attempted to sell as much as I can of the soybeans and corn in advance, before Trump began to indicate the amount of tariffs he was going to charge,” he said.
What’s Next for Farmers?
As the situation escalates, farmers are hoping for more trade deals with countries beyond China. Martin, like many others, is trying to stay patient. “The president says it’s going to be better in the long-term, so we need to decide how patient we need to be,” he said.
However, with no clear end to the tariff war in sight, farmers are left to navigate a challenging and uncertain future. As Slattery put it, Trump’s policies are “a major restructuring of the international order.” For U.S. farmers, this restructuring could mean lasting changes to their livelihoods and the global markets they rely on.