US farmers are feeling the squeeze as trade tariffs between the United States and its key trading partners intensify. Recently, both Canada and China announced retaliatory tariffs on US goods, actions that are expected to have significant impacts on American agricultural exports.
Canada, China, and Mexico are the top three destinations for US farm products, accounting for nearly half of the $191 billion worth of agricultural exports in 2024. The escalation of tariff policies targeting these countries threatens to put immense pressure on the US agricultural sector.
Rising Costs and Shrinking Markets
The imposition of higher tariffs not only makes US agricultural goods less competitive abroad but also increases production costs at home. American farmers heavily rely on imported farm equipment, fertilizers, and pesticides. For instance, about 85% of potash fertilizer used in the United States is imported from Canada. Higher tariffs on these imports mean increased expenses for farmers already operating on thin margins.
Immediate Impacts Felt
Evidence of the tariffs’ negative effects is already surfacing. Some Canadian retailers have canceled orders from US agricultural suppliers, and industry leaders express concern over the future. “A trade war will only hurt those who depend on international trade for their livelihoods, and US agriculture is first in line to suffer,” said Gregg Taylor, CEO of the USA Poultry & Egg Export Council.
With core cash crops like corn and soybeans already experiencing significant losses for three consecutive years, the dual burden of rising production costs and decreasing export income is putting many farmers in a difficult position.
A Growing Financial Risk
The loss of international markets and increased competition threaten to flood the domestic market, potentially leading to oversupply and lower prices at home. Zippy Duvall, President of the American Farm Bureau Federation, warned, “Farmers have been operating at a loss across almost all major crops for three years running. Higher input costs and shrinking export markets could impose an intolerable burden on some farmers.”
The situation highlights a critical challenge: finding a balance between trade policies and the sustainable development of agriculture. For US farmers, the stakes are high, and the outcomes of these trade tensions could have lasting effects on their livelihoods.
