In this article, we explore the adverse effects of Trump’s trade policies on the American agricultural sector, focusing particularly on soybeans. With China traditionally being the largest buyer, recent tariffs have led to significant hardships for various farmers and agricultural suppliers. The challenges faced by farmers are detailed further in recent reports, adding depth to our understanding of this unfolding crisis.
Michael Hudson provides a critical overview of the situation, shedding light on the deepening woes brought on by the current administration’s trade policies. A notable reference is made to a recent article by Nikkei, highlighting the impact of the frozen orders from China on U.S. soybean farmers. The article emphasizes key points, including:
Trump and Chinese President Xi Jinping are set to discuss U.S. TikTok operations and tariff issues soon. However, it remains uncertain if agricultural purchases and the struggles of American soybean farmers will be on the agenda. Analysts suggest that this stalemate underscores China’s strategies and priorities while exposing vulnerabilities in the U.S. system.
“If it were to escalate, China needs to ensure it is prepared for any extreme situations regarding food security,” states Even Pay, director at Trivium China. “China also needs to understand that it cannot be cornered by an antagonistic U.S. government.”
Pay also mentions that China is looking into diversifying its supply sources due to fears of becoming overly reliant on American soybeans.
According to Johnny Xiang, founder of Agradar Consulting in Beijing, China’s procurement of Brazilian soybeans has increased significantly this year, and they now have a stable supply of soy meal from Argentina and Uruguay. “China’s soybean purchases from the U.S. hinge on whether the Trump administration lifts the tariffs on Chinese goods,” he adds.
Typically, Chinese buyers purchase American soybeans in September, following Brazil’s harvest. Experts hold differing views on whether China can entirely bypass U.S. supplies this year if a trade agreement fails to materialize. Some believe that existing supplies may not last until Brazil’s upcoming crop, but Trivium’s Pay indicates that China’s policy statements might imply otherwise.
“Someone will end up taking on some hardship,” she remarked…
This week, the U.S. Department of Agriculture released its lowest soybean export forecast since 2013, predicting exports of just 1.65 billion bushels.
In North Dakota, where agriculture accounts for more than a quarter of the state’s economic activity, about 90% of soybean production is exported, primarily to China. Unlike farmers in southern and eastern states like Illinois, who can pivot to markets in Europe and Mexico, North Dakota’s farmers rely on rail infrastructure designed specifically for shipments to the West Coast and onwards to China.
The Nikkei article also draws parallels to prior strains during Trump’s initial term, where a trade conflict with China significantly impacted soybean exports. During that period, the administration allocated $23 billion in compensation to farmers in 2018 and 2019 to mitigate the losses.
By Michael Hudson, Research Professor of Economics at the University of Missouri, Kansas City, and Research Associate at the Levy Economics Institute of Bard College. His latest book is The Destiny of Civilization
The current predicament underscores how Trump’s policies have catalyzed a crisis in U.S. agriculture through aggressive trade strategies against China and Russia, a tightening of imports due to tariffs, and rising consumer price inflation driven largely by these tariffs. This has affected the affordability of housing and exacerbated the issue of high long-term interest rates for mortgages and loans for agricultural equipment.
- Trump’s Undermining of U.S. Agriculture
Trump’s policies have created a perfect storm for U.S. agriculture. His Cold War tactics have largely closed off China as a crucial soybean market, while tariff policies have hindered imports and inflated costs for farm machinery and essential inputs. Moreover, his inflationary budget deficits are maintaining high interest rates, creating further obstacles for farmers acquiring mortgages and financing equipment, ultimately lowering farmland prices.
Soybeans, a major U.S. export to China, have been particularly affected. Trump’s manipulation of foreign trade has transformed exports into tools of geopolitical power, undoubtedly impacting U.S. farmers as China has ceased buying American soybeans altogether, imposed tariffs, and increasingly turned to Brazil for its soybean supply. After decades of a successful export relationship, U.S. farmers find themselves in dire situations as a result of these developments.
The consequence of China’s shift towards Brazilian soybeans is likely permanent, reinforcing Brazil’s position as a more dependable supplier, especially given the geopolitical climate and U.S. antagonism toward China. Therefore, the significant acreage in U.S. farmland devoted to soybeans faces uncertain futures.
As farmers struggle to find new markets, they risk substantial losses, resulting in crop surpluses that exceed storage capacity. This predicament heightens the threat of foreclosures and bankruptcies, leading to broader economic implications, including the potential for further concentration of farmland ownership into the hands of large financial entities and affluent individuals.
Despite legal challenges to Trump’s tariffs, the possibility remains that a bipartisan Congress will continue to impose such trade restrictions, marking a significant shift toward a more confrontational U.S. trade policy.
Reviving trade in soybeans or other essential commodities with China seems exceptionally unlikely as countries wary of U.S. trade aggression shift towards self-sufficiency.
The challenges extend beyond soybean trade; rising production costs due to tariffs on machinery, fertilizers, and tightening credit are compounding the issues for U.S. farmers.
- Impact of Tariffs on U.S. Industrial Production Costs
Trump’s tariff impositions have led to job losses, particularly with John Deere and Company, resulting in layoffs for thousands of workers within the agricultural machinery sector. As demand falters, the costs associated with raw materials like steel and aluminum, critical for manufacturing, have risen sharply.
Consequently, both domestic production and equipment sales are suffering due to decreased farm income, which has seen yields of corn and soybeans surge this year but prices drop significantly, further limiting farmers’ ability to purchase new machinery.
John Deere imports around 25% of its components, and the tariffs are inflating these costs. The company’s manufacturing facilities, particularly in Germany, have faced severe repercussions from Trump’s unexpected tariff increases on steel and aluminum imports.
Such tariffs also impact international producers leading to further complications and grievances from European partners regarding the unpredictability of Trump’s trade policies.
- Trump’s Push for Greater Foreign Dependence on Oil and the Escalation of Global Warming
Rejecting measures to combat global warming, Trump’s withdrawal from the Paris Agreement and cancellation of subsidies for renewable energy sources reveals the influence of the oil industry over U.S. policies. This approach not only shapes foreign policy but also domestic strategies regarding energy use.
Moreover, U.S. agriculture is facing severe challenges such as dwindling water supplies, which are exacerbated by extreme weather events, largely resulting from climate change—a reality that Trump continues to ignore in favor of supporting oil and coal industries.
This neglect is reflected in rising insurance costs for areas vulnerable to extreme weather, paralleling the soaring housing costs in regions like Miami that are frequently threatened by hurricanes.
The increasing demand for electricity, compounded by the necessity for data centers that support technologies promoted by Trump, is straining energy resources and driving up prices, further inflating production costs across various sectors.
While Trump ridicules China for investing significantly in high-speed rail services, critical economic evaluations overlook the benefits of minimizing reliance on imported oil—a strategy that contrasts sharply with the U.S.’s own energy dependence.
- Trump’s Sanctions: Weaponizing U.S. Exports Against Designated Adversaries
Trump’s threats concerning computer export controls have forced China to withdraw planned purchases from Nvidia, leading the latter to warn of financial repercussions that could hamper its research and development.
This decline in robust export markets, alongside a shrinking pool of imports, has contributed to the weakening dollar amidst rising inflation due to escalating costs across various sectors, including housing and industrial goods.
Despite implementing high tariffs, Trump’s confrontational trade policies have driven away potential foreign investments, undermining the competitiveness of the U.S. market in global trade.
- Trump’s Contribution to Rising Inflation Across Multiple Sectors
Imposing tariffs on vital inputs like aluminum and steel has directly resulted in increased prices for a vast array of industrial products.
Moreover, to accommodate higher production costs, companies have begun to raise prices following a brief delay as existing inventories run out, placing an additional strain on consumer budgets.
Trump’s immigration policies have further complicated the situation, as the construction and agricultural sectors, heavily reliant on immigrant labor, face labor shortages without clear alternatives for replacement.
Rather than fostering foreign investment, Trump’s regulatory and trade conditions have rendered the U.S. market unappealing to potential investors.
- Shifting Monetary Policies Are Causing Long-Term Interest Rates to Rise
Long-term interest rates determine mortgage costs and housing affordability, with Trump’s inflationary approach leading to increased rates for long-term bonds. This focus contributes to predisposing substantial risks to economic stability.
While the wealthiest households continue to dominate consumer spending, rising prices appear to benefit those who can afford luxury goods, emphasizing disparities in economic resilience across different societal segments.
In conclusion, the ramifications of Trump’s trade and economic policies are felt acutely in the agricultural sector and beyond, threatening long-term sustainability and economic viability. The shift in trade relationships, rising production costs, and environmental challenges collectively paint a daunting picture for the future; one that will require thoughtful strategies to navigate successfully.
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[1] Alan Rappeport and Tim Gruber, “China’s Snub of U.S. Soybeans Is Creating a Crisis for Farmers,” The New York Times, September 16, 2025.
[2] Kevin Draper, “John Deere Sputtering As Farmers Struggle,” The New York Times, September 15, 2025.
