As Donald Trump prepares to start a second term in office, farmers are bracing for the prospect of increased tariffs and another painful trade war at a time when U.S. exports already remain uncompetitive.
Trump has threatened a blanket 60% tariff on goods from China in what would be a significant escalation from the first trade war, when duties reached a high of 25%. The former president has also floated 10% to 20% tariffs on other imports.
China remains the largest export market for U.S. farmers, and tariffs reduced agricultural exports by $27 billion in the 18 months or so following the start of the trade war in mid-2018, a report from the U.S. Department of Agriculture found.
A second Trump presidency could once again leave farmers caught in the crossfire. While China was forced to buy some U.S. commodities under Trump’s first term due to grain shortages and the spread of African swine fever, the country is more prepared this time around after making strides in domestic food production.
“China has learned some lessons and now has fairly significant reserves of certain commodities like grain and pork,” said Ben Lilliston, director of rural strategies and climate change at the Institute for Agriculture and Trade Policy. “They’re trying to protect and insulate themselves a little bit from the international market and, in particular, being too dependent on the United States.”
Another trade war could also push China to deepen trade relations with Brazil, which has become a top trading partner. In 2023, Brazil’s agriculture exports to China reached a record $60.24 billion, accounting for 36.2% of the country’s total farm trade.
Higher tariffs could further erode market opportunities for farmers as they struggle to compete with lower-priced commodities from other countries. If China were to retaliate with its own 60% tariffs on U.S. farm goods, it would result in a loss of 25 million metric tons of soybean exports and 90% of corn exports, according to a study commissioned by National Corn Growers Association and American Soybean Association.
“Bottom line: A repeated tariff-based approach accelerates conversion of cropland in South America, which has permanent ramifications on soybean and corn exports worldwide,” the trade groups said following the release of the study, completed by the World Agricultural Economic and Environmental Services. “And U.S. soybean and corn growers bear the burden.”
To offset the losses, Trump said during his campaign that he would move to enforce a 2019 trade agreement that rolled back some tariffs in exchange for China buying $50 million in farm goods. It’s also possible he could revive a massive farm bailout program that paid out more than $28 million to producers in the wake of the trade war.
The certainty of new trade aid remains unclear, however, as Republicans look to limit spending under the USDA’s Commodity Credit Corporation, which was the funding mechanism used to make initial trade payments. Government aid is also unlikely to make up the full losses of reduced trade from China.
Tim Burrick, a farmer from Arlington, Iowa, said he saw the value of his hogs, corn and beans drop $2 million in three months following the start of the first Trump trade war. Trade payments only covered about 10% of the losses.
“It was just a complete disaster,” Burrick said of the trade war in September during a Farm Foundation presidential debate on agriculture policy. “The more I hear about tariffs, the more nervous I get.”