{"id":223,"date":"2025-02-17T22:03:53","date_gmt":"2025-02-17T22:03:53","guid":{"rendered":"https:\/\/midamerica.news\/sigourney-news-review\/2025\/02\/17\/president-trumps-tariffs-bring-return-of-uncertainty-for-americas-farmers\/"},"modified":"2025-03-10T04:49:57","modified_gmt":"2025-03-10T04:49:57","slug":"president-trumps-tariffs-bring-return-of-uncertainty-for-americas-farmers","status":"publish","type":"post","link":"https:\/\/midamerica.news\/sigourney-news-review\/2025\/02\/17\/president-trumps-tariffs-bring-return-of-uncertainty-for-americas-farmers\/","title":{"rendered":"President Trump\u2019s Tariffs Bring Return of Uncertainty for America\u2019s Farmers"},"content":{"rendered":"

by M\u00f3nica Cordero, Investigate Midwest\/Report for America, Investigate Midwest<\/em><\/p>\n

Bob Hemesath has spent his entire life on his Northeast Iowa farm, raising corn and hogs alongside his brother. His business depends on open global markets and stable trade agreements.<\/p>\n

But under Donald Trump\u2019s second term, that stability has once again been disrupted with the president\u2019s push for higher tariffs on some of the nation\u2019s most important trading partners.<\/p>\n

\u201cAnytime that a tariff is put on goods that I sell or export to those countries, that’s going to put me at a disadvantage to the marketplace,\u201d Hemesath said.<\/p>\n

\n

\"\"
Bob Hemesath, Iowa farmer and president of Farmers for Free Trade. (Photo by Bob Hemesath)<\/figcaption><\/figure>
<\/figcaption><\/figure>\n

A few weeks after returning to the White House, Trump threatened a 25% tariff on Canadian and Mexican imports. He also imposed a 10% tariff on Chinese goods, prompting retaliatory tariffs from Beijing and escalating tensions between the world\u2019s two largest economies.<\/p>\n

On Monday, Trump imposed a 25% tariff on all steel and aluminum imports.<\/p>\n

Mexico, Canada and China account for more than 40% of total U.S. trade, valued at more than $2 trillion. As these trade relations become increasingly strained, economic uncertainty has deepened in rural America, leaving farmers bracing for a financial blow similar to what occurred during Trump\u2019s first-term trade war.<\/p>\n

\"\"
pic.twitter.com\/SWZtSm6NMX \u2014 Donald J. Trump (@realDonaldTrump) February 1, 2025<\/figcaption><\/figure>\n

“It certainly does increase the level of uncertainty,” said Ernie Goss, an economist at Creighton University in Omaha, Nebraska, referring to the Trump administration\u2019s tariff policies. “This uncertainty manifests itself in areas such as purchasing farmland and agriculture equipment.\u201d<\/p>\n

Mexico is the United States’ largest agricultural trading partner in terms of total exports and imports, with Canada following closely behind, according to the Economic Research Service of the U.S. Department of Agriculture<\/a>. Agricultural trade with Mexico and Canada is crucial for U.S. farmers, particularly in the exchange of grains and meat products.<\/p>\n

\"\"<\/a><\/figure>\n

Meanwhile, China is also one of the United States’ top agricultural trade partners, especially as an importer of soybeans.<\/p>\n

Trump has claimed any financial harm will be short-lived.<\/p>\n

\u201cWILL THERE BE SOME PAIN?\u201d <\/strong>Trump wrote on social media this month<\/a>. \u201cYES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.\u201d<\/strong><\/p><\/blockquote>\n

But Hemesath, who is also president of Farmers for Free Trade<\/a>, a national non-profit that mobilizes farmers to support trade agreements that expand export opportunities, said trade wars have a lasting impact.<\/p>\n

\"\"<\/div>\n

\u201cThose other countries are going to start looking elsewhere for those products, and if they can find them, that’s a market that I lose as I as a farmer. And that directly affects my bottom line,” Hemesath, a fifth-generation farmer, told Investigate Midwest during a phone interview.<\/p>\n

During Trump\u2019s first-term trade war, China imported fewer soybeans from the United States as it turned to other countries, including Brazil, which emerged as China\u2019s primary soybean supplier<\/a>. Much of that business didn\u2019t return to American farmers once the trade war ended.<\/p>\n

\u201cDuring the previous U.S.-China trade war, China learned a valuable lesson: diversifying supply chains to reduce dependency on U.S. agriculture,\u201d Julien Chaisse, a trade expert and professor at the City University of Hong Kong, said in an email to Investigate Midwest. \u201cBrazil and Argentina were already beneficiaries, and this move will deepen China\u2019s commitment to alternative suppliers.\u201d<\/p>\n

\u201cBeijing does not treat agricultural imports as purely economic transactions but as strategic tools,\u201d Chaisse added. \u201cThis shift is unlikely to be reversed, even if tariffs are later lifted.\u201d<\/p>\n

Facing economic uncertainty, farmers curb their spending<\/strong><\/h2>\n

Retaliatory tariffs from other countries can also increase costs for American farmers.<\/p>\n

In response to Trump\u2019s recent 10% tariff, China imposed 15% tariffs on coal and liquefied natural gas<\/a>, along with 10% tariffs on crude oil, agricultural machinery and pickup trucks.<\/p>\n

China has also responded with expanded export controls on rare earth minerals, an antitrust investigation into Google<\/a>, and the addition of two U.S. companies to its Unreliable Entities List, which tracks and penalizes foreign companies deemed threats to its national interests.<\/p>\n

Meanwhile, Canada\u2019s proposed retaliatory tariffs, currently on hold for a month, would impose a 25% surcharge on a wide range of U.S. products, including live poultry, dairy products, vegetables, coffee, tea, sugar and milling industry products.<\/p>\n

Trade uncertainty and higher import costs can cause farmers to curb their own spending, which can have a negative impact on rural communities.<\/p>\n

\u201cIf some of (a farmer\u2019s) machinery was getting old, they need a new tractor or combine harvester, they\u2019re not going to buy it in this environment,\u201d said Colin Carter, a professor of Agricultural and Resource Economics at the University of California, Davis.\u00a0 \u201cThey\u2019ll delay the purchase because if we get into a large trade war, revenues are going to go down. Who knows whether they\u2019ll be compensated this time? It\u2019s just not a good environment to make investment decisions.\u201d<\/p>\n

With high fixed costs \u2014 land, machinery and loan payments \u2014 farmers don\u2019t have the luxury of sitting out bad years, Carter added.<\/p>\n

\u201cThey don\u2019t have a lot of flexibility,\u201d Carter said. \u201cEven if tariffs are imposed, they still are going to have these large costs. So they have to plant crops, even if they lose money doing it. These lose less money by planting compared to not planting\u201d<\/p>\n

For Hemesath, the Iowa farmer, that\u2019s not just a theoretical concern \u2014 it\u2019s his daily reality.<\/p>\n

\u201cWe sit here now with margins that are still negative margins on raising crops,\u201d he said. \u201cAny loss of market share is only going to make that worse.\u201d<\/p>\n

Last week, during a hearing of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, agricultural leaders voiced their concerns about the potential return of Trump\u2019s tariff policies.<\/p>\n

\n

Farm & ranch families answer the call to feed America\u2019s families & the world, and the tariffs and promised retaliation will put further stress on their livelihoods. The uncertainty hits as operating loans are being secured & planting approaches\u2014leaving farmers in a tough spot.<\/p>\n

\u2014 Zippy Duvall (@ZippyDuvall) February 2, 2025<\/a><\/p><\/blockquote>\n

Josh Gackle, chairman of the American Soybean Association, warned that U.S. soybean farmers are facing significant uncertainty.<\/p>\n

\u201cWith the new administration threatening tariffs on major export partners, our access to global export markets is in jeopardy,\u201d Gackle said.<\/p>\n

The concern is backed by a 2024 study from the University of North Dakota, which found that if China implemented a 20% tariff increase on U.S. soybeans in response to a new trade war, North Dakota\u2019s soybean exports could drop by 59.1%, amounting to an estimated $639.9 million in losses. Nationwide, the study predicts a 32.4% decline in soybean exports, a blow that could devastate farmers already struggling with tight profit margins.<\/p>\n

\u201cI don\u2019t want to be too extreme,\u201d Gackle told Investigate Midwest during an interview in August, \u201cbut it creates a lot of anxiety and uncertainty for U.S. soybean producers, especially those in North Dakota.\u201d<\/p>\n

Trump\u2019s unconventional trade war<\/strong><\/h2>\n

Ron Baumgarten, a former deputy assistant U.S. trade representative who currently works at the Washington, D.C.-based firm BakerHostetler, said Trump\u2019s tariff-driven trade strategy is a fundamental shift in U.S. economic policy.<\/p>\n

\u201cOne of the reasons for the tariffs is to get leverage,\u201d Baumgarten said. \u201cTrump\u2019s theory is that U.S. tariffs are historically low compared to other countries, so why not use them as a negotiation tool?\u201d<\/p>\n

During Trump\u2019s first term, he weaponized trade policy through Section 232 and Section 301 tariffs \u2014 key measures used by the United States to address economic and national security concerns. Now, in his second term, he is taking this approach even further.<\/p>\n

By using the International Emergency Economic Powers Act (IEEPA) \u2014 a never-before-used legal tool to impose tariffs under the guise of national security \u2014 Trump has bypassed public comment periods and regulatory hurdles, making trade decisions without the required checks or balances.<\/p>\n

Trump has threatened tariffs on Mexico and Canada in an effort to tighten border security and curb drug trafficking.<\/p>\n

\u201cThis is the first time trade policy levers have been used on unrelated issues,\u201d Baumgarten said. \u201cWe\u2019ve always sanctioned countries like Russia over Ukraine, but using trade tools for domestic issues like immigration or fentanyl overdoses? That\u2019s a completely new approach.\u201d<\/p>\n

During his first-term trade war, Trump offered billions in farm subsidies to offset the damage. While some farmers appreciated the aid, Hemesath saw it as a short-term fix for a long-term crisis.<\/p>\n

\u201cCertainly, it helps, but it doesn\u2019t compensate fully for what you lose in the market, Hemesath said.<\/p>\n

\u201cAg trade is basically 30% of the farm net income so anytime we lose any trading, any ability to export our products affects the bottom line of our country and our fellow citizens and fellow communities.\u201d<\/p>\n

This article<\/a> first appeared on Investigate Midwest<\/a> and is republished here under a Creative Commons license.