Recently imposed tariffs – some paused, some rescinded, some increased — have created even more uncertainty in the agriculture economy.
The tariffs included reciprocal tariffs against a number of United States trade partners, and a number of tariff carve-outs, such as the United States-Mexico-Canada Agreement (USMCA) exemptions of 25% duties against our U.S. neighbors.
Currently, a blanket 10% tariff has been imposed on imports from many countries, while imports from China — the third-biggest U.S. trade partner — are tariffed at a prohibitive 145% after both countries continue to escalate retaliations. Other reciprocal duties have been delayed for 90 days, while some reports stated that exemptions are in the works for some electronic goods.
Much is still to be determined about the impact these duties will have on ag imports and exports — from machinery inputs to corn and soybeans. Iowa State University professor Chad Hart, an expert in ag economics, spent time with Successful Farming explaining what to keep an eye on during the trade uncertainty and how he says the current lack of clarity is unsustainable for the ag economy.
Where Are We?
“You could argue this goes back months. If we think about President Trump’s trade policy so far during the second term, he has consistently talked about tariffs. So we knew in general what was coming. The chaos comes with looking for the details within that plan,” Hart said.
Hart said he is concerned about the amount of moving parts still remaining.
“Agriculture gets concerned mainly because the uncertainty that we have about our own policies leads to uncertainties on how other countries will respond or act in kind. We know, given trade patterns across the globe, that when the U.S. is looking at what we send to other countries, agriculture does tend to be a significant part of that list of goods and services that we export. So we know that agriculture becomes a natural target for other countries’ responses when it comes to changing their trade policy. So these higher level tariffs are basically targeting the three biggest agricultural markets that we have,” Hart said.
Hart said that while markets are vacillating because they’re trying to “reflect what the reality is today,” it causes angst in the farming and lender communities. He added that it was reminiscent of the trade war with China in Trump’s first term, but he was quick to point out the difference — mainly the amount of tariffs placed on other countries in recent weeks.
“That just creates more uncertainty, because if it was just one country — like it was last time with China — then you can at least work with other markets to hopefully absorb some of the lost sales due to the tariffs. This time around, it’s hard to figure out who would be that set of countries that we can work with, because basically all countries are getting hit by at least some form of tariff. It’s the old thing of, it’s hard to play the game if you don’t know the rules,” Hart said.
A Timeline of Trump’s Trade Wars Between U.S., Canada, Mexico, and China
In the Short Term, Trade Is Doing Well
Despite the uncertainty, recent trade reports (including the USDA WASDE report) show that corn and soybean exports have been rising in the first four months of 2025. Corn exports, he said, is having its second-best export year ever, behind 2020.
Hart said soybean meal and soybean oils have been having a “dramatic resurgence,” and added, “We’ve been thinking domestic crush has been building, and mainly that’s for biofuel usage. Well, USDA’s numbers sort of turned that around and said biofuels continue to grow. But no, it’s been exports that have really surged over the past six months. So here’s a case where you could argue ag is finding the usage growth it has been searching for the past couple of years.”
The problem, though, is the timing.
“We’re finding improvements in the export markets, and of course it’s coming just at the time when the president is deciding to change trade policy,” Hart said. “Right now the markets are sort of caught in between: Exports are surging and wanting to take prices higher, and then here comes a tariff and then taking prices lower again. It’s one of those weird dances where it’s one step forward, one step back. We’re not really going anywhere, but we’re making a lot of noise moving around.”
What This Week’s ‘Whirlwind’ Tariff News Means for Farmers, Explained by Market Analysts
Is This Sustainable?
Hart said U.S. agriculture relies on its ability to trade with the globe and exports to other countries, as the U.S. exports more goods than it imports for corn, soybeans, poultry, pork, and wheat, among others.
With tariffs currently in a holding pattern and the specter of reciprocal duties coming back in less than 90 days if trade agreements aren’t reached, Hart said the current environment is unsustainable for U.S. agriculture.
“I’ll argue the uncertainty is unsustainable. Things have to eventually settle. The challenge is the longer this uncertainty holds out there, other countries will adjust and find other places to source what they look to the U.S. for,” Hart said. “If we think back to the first trade fight with China, what did they do? They looked around and found Brazil, what has turned out to be a steadier market for them to source their soybeans, and they’ve definitely favored that market over ours. That’s why when you’re looking at where global soybean production is now surging in terms of growth, that’s Brazil. They know they’ve got that market now and they know we don’t. If anything, our trading position within that market continues to get worse relative to theirs.
“If you’re looking at Canada and Mexico, they may begin to look at or see what other partners are out there to build trade relationships with. The problem is that when you think about trading relationships, it is a relationship where you have to build trust. We want to work with that other country and build that relationship. Well, uncertainty clouds those relationships and it forces partners to look [for] other ways to fulfill their trade needs.”
U.S. Agriculture Secretary Brooke Rollins Defends Trump Tariffs in Visit to Pennsylvania
What to Watch Out for
Hart said this is the beginning of the story and not the end — but there are a couple of important factors he’s keeping an eye on in the coming weeks and months as the Trump administration implements its trade strategy.
• USDA Export Reports — “Are we still making sales or not? Where are we starting to see significant shifts from what we usually see? Do we see a significant slowdown or not?” Hart said.
• Trade Negotiations — “There’s a heck of a lot of negotiations that have to occur or should be occurring. Realistically, let’s look at our top 10 trade partners. How many of them get addressed? When do we start to see those negotiations? Arguably for ag ... the sooner the better. We know that trade agreements take time to build. It’s not just a one-day negotiation to voila — we’ve resolved all our problems,” Hart said, citing the lengthy negotiations that took place during the creation of the North American Free Trade Agreement (NAFTA) or the more recent USMCA.
• Directly Engaging With Key Partners — Hart said he wants to see the U.S. get “in the room” and negotiate with partners like Canada, Mexico, Japan, South Korea, China, and the European Union sooner rather than later.
Agriculture