What The Hell America!

Tariffs are making life more expensive for John Pihl. He’s been farming in Northern Illinois for more than 50 years.

“These tariffs are going to affect everything. It’ll affect our parts — it’s just across the board. Which is going to hurt everything,” he said.

Not only do tariffs affect the cost of farm supplies, but they also raise the risk of retaliation against exports of U.S. crops: a double-whammy for farmers like Pihl.

“It’s a good way to lose your customers,” he said. “And I think we’ll probably lose more on this round too, because I know that Mexico is our biggest importer of corn. But this time, they may figure out that they can get corn from South America just as easily as from the U.S.”

President Trump has imposed tariffs on countries from the world over, including 25% on steel and aluminum, 25% on some Canadian and Mexican goods, and a staggering 145% on Chinese goods. So far, the most notable retaliation has come from China, which has now imposed a 125% tariff on U.S. goods.

The White House is considering ways to help farmers. “We’re already starting to think about what a mitigation effort might look like,” Secretary Brooke Rollins said on Fox News this week.

She nodded to aid that Trump’s administration gave farmers during his first-term trade dispute with China, money that came from a fund called the Commodity Credit Corporation (CCC).

It’s a fund that had been around since the Great Depression, explained Joseph Glauber, a former USDA chief economist. “This was really a new thing that the Trump administration did, is that they tapped the CCC certainly at a level that had not been seen before for extraordinary payments,” Glauber said.

Soybean planting near Dwight, Ill., in a file photo from April 23, 2020.

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Trump spent $28 billion in his first term helping farmers hurt by tariffs

All told, the first Trump administration spent $28 billion bailing out farmers. This time around, the tariffs are much higher than they were six years ago, and it’s unclear how long they will persist.

NPR asked the White House for details on what relief is under consideration this time, but received no response.

The payments were helpful, Pihl said. But they weren’t a fix for the longer-term damage done by Trump’s first-term tariffs.

“That was just for the one year. What about the market loss that continued through his term and into Biden’s term? I think the amount is incredible,” he said.

China went elsewhere for soybeans

Soybeans are where that damage is most visible. China has long been the largest market for U.S. soybean exports. But during the trade dispute in Trump’s first term, China ramped up its purchases of Brazilian soybeans, replacing U.S. soybeans. The U.S. market share has never recovered.

Corn grows on a farm on August 11, 2024, near Elizabeth, Ill.

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Trump expressed confidence this week that he will be able to reach a deal with China to end the escalating trade fight. For now, some in the farm sector are hopeful about Trump making deals to help farmers.

“You know, he’s a negotiator,” said Kenneth Hartman, Jr., president of the corn board at the National Corn Growers Association. “He did a good job negotiating the [U.S-Mexico-Canada Agreement] USMCA when he negotiated that his first term. So we’re hoping that he can do something like that,” Hartman said.

Tariffs — and aid — can distort market signals

There’s another wrinkle to this all, which is timing. All of this tariff drama is unfolding in the spring, when farmers are making decisions about planting big export crops, like corn and soybeans.

American soybean farmers might decide to grow other crops, like corn, to avoid market risks in China. That could weigh on corn markets.

But also, an aid package announced too soon has the potential to distort markets, said Glauber, the former USDA economist.

“If you’re too generous with one crop vis-à-vis another, you could have farmers making planting decisions based on what they think those compensation payments might be,” Glauber said.

Farmers also say government aid is helpful, but it’s not their first choice.

“Farmers want markets. We need markets. We want to sell our grain at a profit,” said Hartman, adding that CCC payments are only a short-term fix.

“It’s supplemental, it’s needed because it keeps farmers from getting in worse financial situation, but payments are not the answer to a future successful agriculture operation in the United States,” Hartman said.

John Pihl feels similarly about the subsidies. “I don’t want it, but I’ll take it. I’d be an idiot not to take it. That’s about all I can say.”