The Trump Administration Continues To Demonstrate Its Failure To Appreciate the Plight of American Farmers

President Donald Trump is touting his recent “deal” with China as a coup for American farmers. In reality, China is only promising to resume soybean purchases at levels slightly below those of recent years. What was more revealing was the administration’s idea to bail out farmers suffering from China’s boycott of U.S. soybeans, transferring money paid by American importers in the form of tariffs to support a sector devastated by its own policies. This would not have provided a lasting solution to rising input costs, industry consolidation, or many other challenges that have made farming so difficult and undermined key parts of the rural economy—challenges that predate President Trump’s return to the White House but have been made far worse by his administration’s disastrous foreign and economic policies.

China’s boycott of U.S. soybeans was a response to Trump’s trade policies

The most immediate and press-worthy challenge faced by American farmers was that following the launch of the Trump administration’s unprecedented trade war, China stopped buying soybeans altogether. China had previously purchased more than $12 billion worth of American soybean products in 2024, or about half the value of soybeans grown in the United States. Almost overnight, the largest export market for U.S. soybean producers was gone, with China saying that it would not resume purchases until the Trump administration lifted tariffs.

While Egypt, Vietnam, Bangladesh, and other countries are buying more U.S. soybeans, China is by far the largest consumer of soybean and soybean products in the world, and the loss of its lucrative market was potentially devastating for American farmers. States in the Midwest and South faced a particular challenge given the outsize role that soybean production has on their local economies. In fact, more than 80 percent of the land used for soybean production is found in the Midwest.

China grows less than one-fifth of the soybeans that it consumes; the rest are imported, and the United States has traditionally been one of China’s largest suppliers. Indeed, soybeans are by far the largest U.S. agricultural export, and China is the largest buyer. China’s boycott therefore was far from an economic inconvenience; for many farming operations, it was an existential threat to their survival, as around one-quarter of all soybeans produced in the United States no longer had a buyer.

Even after China made its first purchase of soybeans in the lead-up to President Trump’s meeting with Chinese President Xi Jinping, the impact of China’s monthslong boycott will still be felt. More than half of American soybean exports are sold between October and December, after the major harvest season. Much of the country’s harvest thus is still waiting for China to move—and will likely be waiting for a while because China’s commitment to purchase “a massive amount” of soybeans won’t come to fruition for some time.

Producers of soy, as well as growers of corn and other grains, experienced a major harvest yield this fall but have struggled to find places to store it, raising worries that there will not be enough storage space for grains in many places around the country. The Washington Post reported in September that owners of grain elevators, which buy and store large quantities of soybeans before selling them, may not accept soybeans since they lack confidence that they will eventually be able to sell them. All of this is putting significant downward pressure on already low crop prices. Soybean prices, for example, have fallen 34 percent since 2021, a decline faster than that of other commodities. Even after a rebound based on China’s purchase promises, prices remain well below the five-year average price.

China’s boycott was just one part of farmers’ troubles

Even in the best of times, farming is a low-margin business, with many farmers often needing to achieve large economies of scale in order to balance the vagaries of commodity markets and input prices and to reduce their long-term financial risk. The Trump administration’s trade war has only added to an already tricky market for many agricultural growers.

Fertilizer prices spiked in the immediate aftermath of Russia’s invasion of Ukraine. But the situation was made worse by the Trump administration’s massive new tariffs, which raised the cost of some fertilizers by $100 per ton. New tariffs on steel, aluminum, and other metals also raised the cost of tractors, combines, and other farm equipment while making the cost of repairs more expensive as well. Cost pressures are particularly acute for small- and medium-sized producers that often lack the market power to negotiate better prices and do not have the capacity to absorb economic shocks.

The result is that many farmers are delaying equipment purchases, putting off investments in further productivity, and often accumulating additional debt to stay afloat. The latter is particularly troubling because the price of borrowing has increased as well, with the average interest rate charged on loans for land purchases and farm operations increasing 40 percent in the past five years. The Federal Reserve Bank of Chicago, which tracks agricultural lending in Iowa, Michigan, Indiana, and Wisconsin, as well as most of Illinois, reported that farmers are applying for more loans this year than last but that loan repayment has dropped for six consecutive quarters.

With revenue down as a result of low prices and costs up since inputs, repairs, and financing are all more expensive, more than half of U.S. farms are losing money, according to the American Farm Bureau Federation. Court records indicate that farm bankruptcies were up 56 percent in June 2025 compared with the year prior, which is troubling given that Chapter 12 bankruptcies tend to be a lagging indicator that only captures a small part of economic stress facing farms.

And this is to say nothing of other significant headwinds facing America’s farmers. The Trump administration’s roughshod immigration enforcement has left many farmers struggling to find the labor necessary to harvest their crops. Combine this with the Trump administration’s reduction of federal support for rural health care; cuts to the Supplemental Nutrition Assistance Program (SNAP) that will result in billions of dollars of lost farm revenue; and destruction of the U.S. Agency for International Development, which was a major purchaser of U.S. agricultural output, and the situation appears that much worse.

Moreover, there are considerable long-term challenges facing farmers as well. Climate change continues to take a toll on farm profitability, as weather extremes affect crop yields and make planning for future demand more difficult. The Midwest, for instance, is one of the most agriculturally productive regions in the world but is expected to face extreme swings in precipitation that will diminish yields as well as animal production, according to the Fifth National Climate Assessment. Already, climate-induced droughts have lasted longer and have been more frequent than in decades past, leading to a severe disruption in barge traffic that further complicates the balance sheets of most farmers. Barge traffic down the Mississippi River, for example, is down 27 percent from last year as a result of the river’s water levels predicted to reach a “low threshold” of minus 8 feet, according to the National Oceanic and Atmospheric Administration (NOAA). Lower water levels mean fewer barges floating down the river at one time, increasing the cost of shipping farm products.

The Trump administration’s trade war is creating export markets for others at the expense of American farmers

For many farmers, particularly those who relied on exports to sustain their business, damage to trading relationships cannot be undone even after the Trump administration reached a trade truce with China. During the first Trump administration’s trade war with China, U.S. pork producers lost market share and still have not gained it back. Once a foreign buyer establishes a supplier relationship with a different producer, it is hard to win them back. From China’s perspective—and likely the perspective of other foreign buyers as well—U.S. suppliers are now unpredictable and thus riskier than other alternatives, a bad position to find oneself in when selling a commodity product. What is frustrating for so many farmers is that their perceived unpredictability has nothing to do with them, but rather the Trump administration’s impulsivity.

And, importantly, soybean farmers are not the only victim of China’s retaliation to the Trump administration’s trade war. In March 2025, China allowed the export licenses of hundreds of beef facilities to expire, essentially blocking them from selling to China. Since then, U.S. beef exports to China have fallen by more than 90 percent. Total U.S. agricultural exports to China have now dropped nearly $7 billion since January, a staggering decline of more than 73 percent, according to an October report by the Center for Strategic and International Studies.

China, moreover, is far from the only problem. President Trump’s belligerence on the world stage and his willful destruction of global trade norms have pushed countless other markets to conclude trade agreements that open up new markets for them, often at the expense of the United States. For example, the new trade deal that the European Union struck with Mercosur—the South American bloc that includes Argentina, Bolivia, Brazil, Paraguay, and Uruguay—and sent to the European Parliament in September portends significantly more agricultural exports from South America into Europe. So does a deal that the European Union announced to update its existing trade agreement with Mexico.

Note, too, that Brazil’s expansion into new export markets once captured by American farmers is occurring against the backdrop of the Trump administration’s decision to impose 50 percent tariffs on Brazil in protest of the Brazilian government’s prosecution of its former president’s attempted coup, pushing even more Brazilian agricultural exports onto world markets. In September, while China was forgoing soybean purchases from the United States, it bought 7.2 million tons of soybeans from Brazil, according to Brazil’s national association of grain exporters. Importantly, this is far from a temporary flirtation with Brazil. Chinese state-owned companies have taken stakes in major Brazilian ports, and the Brazilian government is working closely with China to build a railway connecting Brazil to Peru’s Chancay port, which could dramatically cut shipping times to Asia.

The expansion of Brazilian soy exports to China is not only bad for American farmers but also the climate. Half of Brazil’s soybean production occurs in the Amazon biome, and Brazilian farmers are cutting down swaths of the rainforest to clear land for additional soy cultivation to fill export orders.

Farmers want lasting solutions for themselves and the communities where they live

American farmers are facing one of the toughest markets in recent memory, but it is important to remember that investing tens of billions of dollars to prop up the industry—something the Trump administration likes to fall back on—will neither solve the crisis facing U.S. farmers and ranchers nor make the structural reforms necessary to effect lasting change. As Farm Action, a nonpartisan farm advocacy organization, wrote last month: “Recurring bailouts for commodity crops aren’t bad luck or short-term trade issues. They’re symptoms of a farm economy built on overproduction and dependence.”

What is more, ill-conceived bailouts are likely to drive change in agricultural land ownership as investors seek out assets artificially propped up by government guarantees against losses. Too often, the entry of hedge funds, wealthy investors, or larger farming operations into land markets raises prices, increases farm consolidation and absentee ownership, and pushes young farmers out of markets. The result is a less diversified and more vulnerable agricultural sector that is increasingly disconnected from rural economies. Many of the highest-productivity agricultural counties—measured by gross domestic product (GDP) per capita—are losing population. President Trump’s bailout plan—or a negotiated resumed soybean purchase by China, negotiated by Treasury Secretary Scott Bessent, who, as an investor in agricultural land, stands to benefit directly from his political position—would only exacerbate these trends by privatizing the gains and socializing the losses.

The Trump administration’s proposed bailout of farmers is so troubling because it demonstrates a nonchalance, or ignorance, to the very real problems farmers face and have faced for years. Writing a check to farmers helps in the short term, but even in the most optimistic scenario, input costs are likely to remain high, demand volatile, the climate ever-changing, and corporate consolidation and investor ownership of land firmly entrenched. In other words, planning for next year’s planting season will be extremely difficult, but without a comprehensive plan to make farming a more sustainable, more prosperous enterprise, planning in subsequent years likely will not be any easier. President Trump’s “solution” is to simply pay off farmers. Farmers want trade, not aid. And they want government policy that supports farmers and the communities where they live over the long term.

China’s boycott of U.S. soybeans may have made the situation far worse, but addressing only the current trade dispute will not solve the structural issues that have trapped American farmers in a cycle of debt, volatility, and consolidation. The Trump administration’s reckless trade wars only make the cycle worse. American farmers deserve more, particularly when the Trump administration was quicker to bail out Argentina—a major export competitor to American farmers—with a $20 billion lifeline than it was to offer U.S. farmers assistance. Indeed, on the same day that Secretary Bessent announced the initial Argentina bailout, Argentina sold 20 shiploads of soybeans to China. And now, the administration is hoping to quadruple beef purchases from Argentina, putting even more downward pressure on American ranchers—a plan that Rep. Jason Smith (R-MO), the chair of the House Ways and Means Committee, said would be “devastating” to American cattle producers.

At a minimum, Congress and the administration should develop plans to make American farms more profitable and to limit—or even reverse—the industry’s continued consolidation. The goal should not be to delay a financial cliff, as is often the case with bridge loans and one-off government payments, but to ensure that farmers and their communities are economically secure over the long term. This includes opening new markets for their exports; deploying new technologies that can improve productivity; tying subsidies to outcomes such as diversification and sustainable practices; and revamping government finance programs and lowering the burden of other financial stressors, particularly health care and insurance, for farmers and rural communities.

Given the outsize role that climate change has on farming communities, this effort must also align farm and climate policy more directly. Certainly, this includes investments in adaptation and resilience, limiting the effects of climate change on agricultural production and shipping; but it also includes ensuring that farmers and rural communities benefit from the green transition, providing a revenue source that diversifies and stabilizes farm balance sheets.

During the 1980s, American farmers endured a crisis more severe than any since the Great Depression, primarily because of a failed government policy; the accumulation of debt; high interest rates; falling commodity prices; and several extreme weather events—namely, major droughts in 1983 and 1988. It is eye-opening that, today, American farmers face many of the same challenges; and it is equally eye-opening that the Trump administration seems to think that a one-time payoff or negotiated purchase order will solve the problem.