American Farmers Face Mounting Challenges as Trump’s Tariffs Take Toll
American farmers are bracing for further economic strain as President Donald Trump’s tariffs on Canada, Mexico, and China threaten to exacerbate an already precarious situation. According to the latest Purdue University/CME Group Ag Economy Barometer, nearly half of U.S. farmers believe a trade war leading to a significant decline in agricultural exports is “likely” or “very likely.” This sentiment comes amid growing concerns that the farming sector may struggle to remain profitable by 2025.
Caleb Ragland, a soybean farmer from Magnolia, Kentucky, has been a steadfast supporter of President Trump, voting for him in 2016, 2020, and 2024. However, Ragland now finds himself navigating a complex tariff landscape at a time when the agricultural industry is already under significant pressure.
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Ragland, who farms with his wife and three sons, comes from a long line of farmers—his family has worked the land for over two centuries. But in recent years, he has witnessed a sharp decline in crop prices coupled with rising production costs. Soybean futures have plummeted by more than 40% over the past three years, with corn futures also taking a hit.
The tariffs imposed by the Trump administration, along with retaliatory measures from other countries, have added to the industry’s challenges. Ragland, who also serves as president of the American Soybean Association, worries about the future of his family’s farming legacy.
“My sons could potentially be the 10th generation to farm this land, but if policies beyond our control continue to manipulate prices by 20% or 30% while our costs rise, we won’t be able to stay in business,” Ragland said.
A History of Trade War Fallout
This is not the first time farmers have faced the brunt of tariffs. During Trump’s first term, the 2018 trade war with China cost the U.S. agriculture sector over $27 billion, with soybeans accounting for 71% of the losses. The U.S. has yet to fully recover its share of the Chinese soybean market, the world’s largest buyer of the commodity, according to the American Soybean Association.
“Tariffs break trust,” Ragland noted. “It’s much harder to find new customers than to retain the ones you already have.”
Escalating Tensions
Last week, the White House imposed a 25% tariff on goods from Canada and Mexico, alongside an additional 10% duty on Chinese imports. Although Trump temporarily delayed tariffs on automakers and paused some tariffs on Canadian and Mexican goods until April 2, he hinted in a Fox News interview that tariffs “could go up” over time.
China, excluded from these exemptions, retaliated with tariffs targeting U.S. agricultural products. U.S. soybeans now face an additional 10% tariff, while corn is subject to an extra 15% charge.
“We’re already unprofitable,” Ragland said. “Why are we adding insult to injury by essentially taxing the agricultural sector?”
While Ragland acknowledges Trump’s negotiating skills and hopes for his success, he stresses that soybean producers lack the flexibility to withstand a trade war that erodes their bottom line. “Folks are upset,” he said, emphasizing the need for trade barrier reductions and a new five-year farm bill to provide relief.
Policy Implications
Agriculture Secretary Brooke Rollins indicated last week that the administration is considering exemptions for some agricultural products from tariffs on Canada and Mexico. Trump’s recent adjustments included reducing the tariff on potash, a key fertilizer ingredient, to 10%.
Canada supplies over 80% of U.S. farmers’ potash needs, according to Ken Seitz, CEO of Nutrien, a Canadian crop inputs provider. Speaking at the BMO Global Metals, Mining & Critical Minerals Conference last month, Seitz warned that the cost of tariffs would likely be passed on to American farmers.
Farmer Sentiment and Economic Impact
Even before the tariffs took effect, American farmers were voicing concerns. While the February Ag Economy Barometer showed a slight improvement in overall farmer sentiment, 44% of respondents identified trade policy as the most critical issue for their farms over the next five years.
Michael Langemeier, an agricultural economist at Purdue University, noted that crop insurance—typically the top policy concern for farmers—was overshadowed by trade policy in the survey. “The fact that crop insurance was a distant second speaks volumes,” he said.
Langemeier estimated that tariffs caused a 33% per-acre drop in net returns for soybeans and corn between mid-February and early March. He also suggested that the tariffs might accelerate the passage of a new farm bill, which he expects to be signed later this year.
Market Reactions and Long-Term Outlook
Bank of America analyst Steve Byrne warned in a February 25 note that tariffs could lead to “more conservative purchases of crop inputs,” potentially reducing fertilizer sales and affecting companies like Nutrien, Mosaic, and CF Industries. Shares of these companies, along with other agricultural stocks such as AGCO and Deere, declined following Trump’s tariff announcement.
Morningstar equity strategist Seth Goldstein believes the trade war’s long-term impact on American farmers may be limited. He predicts that global trade flows will adjust over the next two to three years, with other countries potentially increasing their purchases of U.S. soybeans to offset shifts in Chinese demand.
However, some analysts, like Oppenheimer’s Kristen Owen, argue that tariffs could solidify Brazil’s position as the leading global producer of corn and soybeans, while the U.S. becomes a secondary supplier. “Brazil has more capacity to expand its acreage and increase its share of the global grain trade,” Owen said. “Tariffs and other policy decisions are accelerating this shift.”
As American farmers face mounting challenges from tariffs and retaliatory measures, the long-term outlook for the agricultural sector remains uncertain. While some hope for a recalibration of global trade dynamics, others fear that the U.S. may lose its competitive edge in key markets. For farmers like Caleb Ragland, the stakes are deeply personal. “You’re talking about people’s livelihoods,” he said. “We need policies that support, not undermine, our ability to survive.”
