(Bloomberg) — President Donald Trump is asking American growers to bear with him as tariffs threaten to hurt their business and deepen a farm downturn that’s entering a third year.
Beijing has already enacted countermeasures on a range of agricultural commodities including soybeans, pork and beef. Canada also hit back at Trump, retaliating against about $107 billion worth of US goods, including food products from meat to dairy. Mexico plans to make an announcement on Sunday.
The trade disputes are a blow for American farmers, a key voting bloc for Trump. But in a speech to Congress, the president promised his newly announced duties will yield even better results than the trade deal he struck with China during his first term.
“It may be a little bit of an adjustment period,” he told Congress late on Tuesday. “We had that before when I made the deal with China, $50 billion of purchases and I said ‘just bear with me’ and they did, they did — probably have to bear with me again, and this will be even better.”
The US raised tariffs on China to 20% and introduced 25% duties on most Canadian and Mexican imports this week. The administration also pledged to add duties on a range of farm purchases from April 2 as food imports balloon, driving the country’s agriculture trade deficit to a record $49 billion this year.
On Wednesday, though, Commerce Secretary Howard Lutnick said Trump is set to announce changes to the tariffs on Canada and Mexico, with potential relief for automobiles and other sectors. He also suggested that a broader review due April 2 could incorporate goods that get relief this week.
Still, retaliatory tariffs already erased all of this year’s gains for corn and soybeans. That’s hurting farmers whose income has been under pressure for the last three years as the cost of seeds, fertilizer and equipment went up and crop prices declined. Revenue from cash crops is expected to fall for a third year in 2025. And that was before any tariffs were in place.
“I really thought 2025 would bring about some relief for farmers — as of right now it still looks tough on the farm front, especially with tariffs threatening export markets,” said Jim Beck, founder of Arenzville, Illinois-based Strategic Commodities, which advises growers. “I trust and support President Trump. It’s unfortunate that we have to deal with the tariffs and the ever-changing headlines.”
Curt Covington, senior director of institution credit at AgAmerica, the country’s largest independent farm lender, said he’s seeing the most distressed borrowers since the financial crisis. Barry Benson, head of agribusiness banking at First National Bank of Omaha, said roughly a third of the lender’s producers already had “some sizable losses” that required a degree of restructuring last year. If 2025 is worse, more and bigger reorganizations may be necessary, he said.
Other measures taken by Trump have also had an impact on growers. That includes a funding freeze as the administration reviews a number of Biden-era projects including the Inflation Reduction Act, the former president’s signature climate law.
$30 Billion
Agriculture Secretary Brooke Rollins has promised payments will be dispensed, and said growers should soon get the first tranche of $30 billion in assistance passed by Congress in December under Joe Biden. In a speech on Friday, she acknowledged farmer concerns about tariffs and financial relief in a speech.
“I want you to know that your concerns are heard and that I will always be your greatest champion, second only to President Trump,” she said.
Kevin Leavitt, a farmer from Maine, tapped a $45,000 grant from the US Department of Agriculture’s Rural Energy for America Program to help build a solar array to power greenhouses on his organic vegetable farm. If he doesn’t receive the money he’s due, that would put the operation, where he’s raised crops like tomatoes, cucumbers, lettuce and kale since 2015, “on the trajectory to close up,” he said.
Leavitt is not alone. At least 10 farms in Maine are waiting for outstanding payments of more than $1 million, according to Sarah Alexander, executive director of the Maine Organic Farmers and Gardeners Association. And while the USDA has begun releasing some funding, assistance including $300 million that was promised to distressed farm borrowers last December is still tied up.
On Tuesday, the Illinois Department of Agriculture said the USDA is ceasing reimbursements for the Local Food Purchase Assistance Program, which allows the state to buy food from growers to distribute to communities in need. Funding was also cut off for the Resilient Food Systems Infrastructure Program, which offers new streams of revenue for small and mid-sized agricultural producers.
Bank Loans
“Cutting funds for these programs is a slap in the face to Illinois farmers and the communities they feed,” said Governor JB Pritzker, who is widely thought to have presidential ambitions for 2028.
Delays in receiving federal payments can also make it more difficult for farmers to secure loans from banks, said John Boyd Jr., a fourth-generation farmer and the founder of the National Black Farmers Association.
“It doesn’t help with agricultural lenders when they look out here and see the uncertainty that this administration is putting in place,” Boyd said. “If you can’t get access to credit, the next thing for a farmer is they wind up on the auction block in foreclosure.”
To be sure, many in the industry are still optimistic. The Purdue University survey of farmer sentiment rose to the highest since 2021 in February, even as nearly half of respondents thought the industry was at risk of a trade war that would result in a significant decrease in agricultural exports.
Trump also gave farmers $28 billion in funds during his last administration to cushion the blow of his trade war with China. That could happen again this time around.
Trade Opportunity
The president’s use of tariffs as a negotiating tool could create new trade opportunities, said Benson of the First National Bank of Omaha. Jim Sutter, chief executive officer of the US Soybean Export Council, said he sees the tariffs as an opportunity to improve trade relations, including revisiting the agreement with China that Trump boasted about in Congress on Tuesday.
“That would be so much better for both the Chinese and the US, rather than going through a trade war,” he said in an interview at the Commodity Classic conference in Denver this week.
Proposed tariffs on Mexico, Canada and China could have wide-ranging effects on agriculture: Fertilizer prices are likely to go up just as farmers lose export markets for crops such as soybeans, adding another burden to cash-strapped growers. Duties on imports of agricultural commodities could hurt industries such as candy and chocolate makers as well as suppliers of fresh fruit and vegetables.
“Any type of tariff situation would just add costs onto farmers, or it could reduce our price that we receive for our wheat, which is already below break-even,” said Michelle Hennings, executive director at the Washington Association of Wheat Growers. After several years of low grain prices and higher input costs, “many farmers are left with almost nowhere left to cut.”
–With assistance from Isis Almeida.
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