The proposed sweeping tariffs on U.S. imports from foreign countries by the incoming Trump administration could have severe consequences for the American agricultural sector, as highlighted by economists during a Wednesday Joint Economic Committee hearing.
Ed Gresser, director for trade and global markets at the Progressive Policy Institute, warned the impact on U.S. agriculture would be “quite extensive.” He estimated tariffs on major trading partners like Canada, Mexico and China could affect up to 10% of all farm income, creating significant financial challenges for farmers.
The proposed tariffs risk destabilizing existing trade agreements, such as the U.S.-Mexico-Canada Agreement (USMCA), potentially jeopardizing tariff-free trade with two of America’s top agricultural export markets. Furthermore, escalating tariffs on Chinese goods could undermine already declining exports to one of the United States’ largest agricultural trade partners.
Historical precedent suggests U.S. trade policies targeting major partners like China often trigger swift and severe retaliatory measures. For instance, during the 2018-19 trade conflict, China responded to U.S. tariffs with significant retaliatory tariffs on American agricultural products, leading to substantial financial losses for U.S. farmers, particularly in the Midwest.
Under various tariff scenarios, U.S. soybean and corn prices could face significant downward pressure. Studies indicate that soybean prices could fall by nearly $1 per bushel on average, while corn prices could drop by $0.13 per bushel from already low baseline levels.
Depending on the scenario, U.S. soybean farmers could lose an average of $3.6 to $5.9 billion in annual production value, while corn farmers might face losses of $900 million to $1.4 billion annually.
The impact of these tariffs would extend beyond farmers, affecting rural communities where agricultural activities play a crucial economic role. The combined soybean and corn contribution to total economic output could potentially drop by $4.9 billion to $7.9 billion annually under different tariff scenarios.
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