President Donald Trump is pledging to use tariff revenue to bail out farmers reeling from the impact of the ongoing trade war.
“We’re going to take some of that tariff money that we made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until the tariffs kick into their benefit,” Trump told reporters in the Oval Office on Thursday. “So we’re going to make sure that our farmers are in great shape, because we’re taking in a lot of money.”
Agriculture secretary Brooke Rollins said last week the administration was weighing this action.
The White House did not immediately respond to Fortune’s request for comment about details regarding the bailout.
Farmers—a historically loyal constituency of Trump’s—have sounded the alarms about how the administration’s tariffs exacerbated trade disputes that have endangered U.S. export markets as production costs remain stubbornly high or even increase.
“The frustration is overwhelming,” the American Soybean Association (ASA) President Caleb Ragland said in a statement on Wednesday. “The farm economy is suffering while our competitors supplant the United States in the biggest soybean import market in the world.”
Treasury Secretary Scott Bessent said on X on Wednesday the U.S. would provide financial support to Argentina as it tries to stabilize its economy. As part of its stabilization efforts, Argentina eliminated its export tax on soybeans, and China reportedly ordered 10 cargoes of the crop from the South America country. China received nearly a quarter of the U.S. soybean exports in 2024, but has not ordered any U.S. soybeans since May. The country has instead turned to cheaper alternatives from Argentina and Brazil, which have continued to gobble up market share from the U.S. over the last decade.
The National Corn Growers Association has been similarly distraught, with corn prices plunging more than 50% from their 2022 peak while production costs have decreased by only 3% in the same timespan. Corn and soybeans accounted for 45% of the U.S.’s cash crop receipts in 2024, according to the U.S. Department of Agriculture.
Meanwhile, input costs for production continue to eke up. August data from the North Dakota State University Agricultural Trade Monitor indicates tariffs rates for self-propelled machines like tractors are at 15%, while rates for herbicides and some pesticides are at 25% as a result of ongoing trade disputes.
Trump’s trade war deja vu
Trump’s previous actions to bail out farmers have seen mixed success. Many of the problems plaguing U.S. farmers today are a redux of the issues that arose in the president’s first term.
U.S. farmers lost $27 billion in agricultural exports between mid-2018 and 2019 as a result of a trade war with China, according to a 2022 report from the USDA. The first Trump administration responded to the crisis with a $28 billion bailout for farmers, effectively erasing the immediate economic losses. But the market erosion from the initial trade war is lasting, farmers and economists said.
“The takeaway that we have from the data of the last time we did this is that the U.S. lost about 20% of our market share, and it never came back,” Todd Main, the director of market development at the Illinois Soybean Association, told Fortune.
According to Wendong Zhang, an associate professor of applied economics and policy at Cornell University’s SC Johnson School of Business, financial support for farmers today would have similar consequences.
“It will compensate for the immediate economic losses due to tariffs, but it doesn’t necessarily improve the long-term competitiveness of agriculture on the global stage,” Zhang told Fortune.
Farmers have made their stance clear, arguing a trade deal with China is the best way to sustain the agricultural export industry, which reached $176 billion in 2024.
“We can grow anything. What we really want is good relations with our trading partners,” Illinois Soybean Association’s Main said. “We want markets. We don’t want bailouts.”
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