The following is the opinion and analysis of the writer:
Ronald Eustice
I am writing from Minnesota where the harvest is in full swing as farmers harvest millions of bushels of corn, soybeans, and other crops. In a typical year, exports account for at least 20 percent of total U.S. farm production and make the difference between profit and loss. The farm economy is struggling this year owing to tariffs and a labor shortage caused by Trump’s mass deportation plans.
Trump’s tariffs spell big trouble for farmers. Until the first trade war erupted between China and the U.S. during Trump’s first term, China was the No. 1 destination for U.S. agricultural goods. That came to a screeching halt during Trump’s 2018 trade war until China signed a 2019 agreement to import a set volume of US agricultural goods for two years. Meanwhile, China began diversifying its suppliers, by buying food and grain from reliable suppliers such as Brazil, Argentina, Paraguay and Uruguay.
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The USDA estimates 40% of American soybeans are exported. China and Mexico are the largest markets, eclipsing all others. Brazil is the world’s largest grower and exporter of soybeans with a record soybean crop of 170 million metric tons. This continues Brazil’s trend as a global leader in soybean production and exports. Argentina, Paraguay and Uruguay also rank in the top tier of countries in soybean production.
Trump’s allies claim the tariffs are cost-free and will offset the national debt, not true. I learned from Economics classes that with tariffs, there are no winners and eventually nearly everyone loses. Just ask America’s soybean farmers. This year, combines are harvesting a bumper crop that will sit in storage for want of buyers. Farmers are struggling financially because rising costs of imported fertilizer, fuel, and machinery have pushed production costs to record levels. This fall, nearly every bushel of U.S. grain will be produced at a loss.
Trump’s tariffs threaten to destroy markets that U.S. exporters have worked hard and long to win. A proposed ten-billion-dollar bailout to U.S. soybean farmers is a temporary fix, but once markets have been lost, recovery of those markets can be slow, tedious and doubtful. Farmers have been some of Trump’s most loyal supporters and now they will be victims of his tariffs. Trump has convinced farmers he is watching out for their interests, and overwhelmingly, they foolishly believe him. He takes credit for bailouts to offset damage caused by his policies. Trump has promised to compensate farmers with even more subsidies, how will that balance the budget? How about not hurting the farmers in the first place?
Argentina, Brazil, Paraguay and Uruguay are the beneficiaries of Trump’s tariff tantrum and are exporting millions of bushels of soybeans and other commodities to China and elsewhere. The irony is that Trump is proposing a $20 billion bailout for his friend President Javier Milei in Argentina, one of our main soybean export competitors. Milei who has led Argentina since December 2023, is a close Trump ally and is now facing off to serious domestic threats to his free market movement. Amid these troubles, Trump said he would help his counterpart secure “all of the things that you need to make Argentina great again.”
It won’t stop here. We can expect more bailouts in future years because competitors have grasped control of our traditional agricultural product markets, perhaps permanently. It’s not just export of soybeans, its beef, pork, poultry, apples, corn and many other crops that have helped make America’s farms the “breadbasket” of the world. Most likely, these markets are gone, perhaps forever. Increasingly South America’s grain and beef production is rapidly over taking our own.
Trump promised to “drain the swamp” in Washington but this year the “Beltway Bandits” are flocking to Washington and standing in line to beg for handouts to farmers to save them from bankruptcies caused by Trump’s blunders. Those who praise Trump and his policies the loudest are quickly ushered to the head of the line.
The Wall Street Journal editorial board called Trump’s tariff tantrum “the dumbest trade war in history.” That’s the dark truth about Trump’s tariffs.
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Ronald Eustice is a retired international marketing executive and the author of more than 35 books on a variety of topics. He has traveled to more than 100 countries including Russia and Ukraine and lives in Casas Adobes. He owns a farm in Minnesota and raises soybeans.
