Recently, China struck a deal with the US to suspend retaliatory tariffs on US imports and promised the purchase of 25 million metric tons of soybeans during the next three years. Yet, the renewed deal with China and announcements of farmer’s aid don’t solve the underlying problems driving US farmers towards bankruptcy. Agricultural tariffs have inhibited farmer exports, caused billions in losses and unprofitability, and government aid to farmers creates a cycle of dependency that band-aids US farm unprofitability rather than solving it.
Agricultural tariffs have inhibited US agricultural exports and damaged trade relations with China.
In the first 6 months of 2025 there were 57% more farm bankruptcies than in the same period last year, driven by unprofitability in corn, cotton, wheat, and the drop in sales in its biggest industry: soybeans. Soybeans have historically been America’s largest agricultural export by value and their largest customer, China, has purchased around 60% of US soybean exports annually. Yet, retaliatory tariffs imposed by China in March, including a 15% tariff on US agricultural products, halted soybean exports.
The tariffs have put American soybean farmers at a 20% price disadvantage to competitors like Argentina and Brazil, who have made up the bulk of China’s soybean purchases this year. Although China recently agreed to purchase 25 million metric tons of soybeans for the next three years, the nation will keep the 10% levies introduced in response to President Donald Trump's tariffs, and U.S. soybeans will still face a 13% tariff.
As a result, farm income is still projected to decline by 8% this year as cash receipts from crops fall by 13%. As soybeans and other crops like corn and wheat remain unprofitable, American farms are bleeding money as a direct result of tariff policy.
Input tariffs have made American farms fundamentally unprofitable, driving billions in losses for American farms.
Input costs like fertilizer prices remain high due to retaliatory tariffs from countries like Canada, where most of the potash fertilizer American farmers rely on is imported from.
Data shows that tariffs have raised costs of some fertilizers by $100 per ton. Steel and parts tariffs make tractors, combines, and repair parts more expensive, driving higher input costs and thinning margins for farmers. Costs to farm continue to rise while commodity prices diminish.
According to an Ohio soybean farmer, everything “from phosphate and potash to agricultural chemicals, herbicides, and machine parts is up by 50% over the last decade, while our proceeds from the sale of crops are down by 40%.”
The tariff rates are now over 20 percent for some pesticides, close to 17 percent for some fertilizers, and 16 percent for tractors and other machinery. Due to rising costs, low crop prices, and the effects of the trade war, economists project that growers could see roughly $44 billion in net cash income losses from their 2025–26 crops.
Agricultural aid has been inequitable and doesn’t solve the underlying issue of farm unprofitability and shrinking access to markets.
The U.S. Department of Agriculture (USDA) paid farmers close to $30 billion to make up for tariff-related losses. Yet, a farmer in North Dakota argued the government used an “archaic formula” last time, which meant farmers in some states were paid much more than what farmers in North Dakota received. An Environmental Working Group analysis also found that about a quarter of the money went to the top 1 percent of farms by size.
More recently, Trump promised a bailout for American farmers (up to 13B) that would be paid for by tariffs. The concept of a bailout funded by tariff revenue raises the question: are these proposed aid packages just returning the money that farms have been forced to pay this year through higher input costs?
The solution to damage wrought to the agricultural industry isn’t more aid packages—aid does nothing to open international export markets for farmers or lower costs of inputs. The fundamental disease plaguing American farms needs to be addressed: they don’t need short term money, they need fair access to global agricultural markets and an equal access to inputs. With the farm losses projected to outweigh tariff revenue collected, it's clear that high international tariffs on agricultural inputs and exports are the culprit of America’s struggling farms.
The bottom line:
Many US farms are heavily leveraged on equipment, land, or other loans on inputs and don’t have time to deal with irrational tariff policies and volatile trade markets. The first trade war with China cost farmers $27 billion in exports and resulted in the shutdown of farms across America. Current tariff policy, which is leading many farms to operate at a loss, continues to be an existential threat to farmers across America.
The benefit of tariff revenues are outweighed by the consequences of the bankruptcy of US farms, China’s shifting market away from US producers, and the permanent damage being done to long-standing farms across America. Current agricultural tariffs and input tariffs are crippling agricultural production and irreparably damaging the livelihoods of American farmers.
American farmers don’t need bailouts to survive, they need policy change.
