Commentary by Stephen Macaulay
“During the trade war, when China targeted soybeans and other US agricultural products with retaliatory tariffs, American farmers had to be bailed out with tens of millions of dollars in federal subsidies. Both sides have the same fear: that as the bilateral relationship deteriorates the other will suddenly weaponize trade flows and restrict imports or exports. While US farmers remain vulnerable to the whims of Beijing, Chinese importers are diversifying their sourcing to become less reliant on the United States.”—Chad P. Bown and Yilin Wang, Peterson Institute for International Economics
Here's the thing: that quote comes from March 21, 2023.
“Farmers getting squeezed on both ends of a renewed and potentially uglier trade war likely means taxpayers will get squeezed to help cover the consequences. The first Trump administration took $23 billion from taxpayers and gave it to farmers to compensate for their losses. In her January Senate confirmation hearing, Agriculture Secretary Brooke Rollins referenced the bailout, noting, ‘We are prepared to execute something similar … we can’t reinvent the wheel.’”—Tad DeHaven, the Cato Institute
That is something closer in time: March 26, 2025.
But it is notable because the Cato Institute’s mission, in part is “moving public policy in the direction of individual liberty, limited government, free markets, and peace,” which makes it more conservative in the classic sense than many so-called conservative organizations out there.
And to get to October 7, 2025, there’s this in a story in The New York Times titled “Trump to Unveil Farmer Aid as China Shuns U.S. Crops”:
“We have an export-dependent industry, we’ve angered its biggest customer, and, boom, now we’re bailing out the export-dependent industry.”
That’s from Scott Linicome, veep for general economics at Cato, referring to China (the “biggest customer”) and American farming (the “export-dependent industry”).
According to the Times article:
“Through July, China bought $2.5 billion fewer soybeans than the same period last year and has purchased none since May. If Chinese buyers continue holding out, America will sell $10 billion fewer soybeans to China than it did last year.
“The drop in sorghum exports is even starker. Last year China bought about $1.3 billion worth of American sorghum. But sorghum exports to China are down 97% this year.”
President Trump has suggested that he’s thinking about taking some of the money taken in by tariffs (a.k.a., the taxes on goods Americans buy from foreign countries) and distributing them, once again, to the farmers.
A couple of points.
Trump has characterized tariffs as the price that other countries pay (they don’t) in order to have the opportunity to sell their goods in the US.
So, sugar and coffee, fresh fruits and vegetables, and more have higher prices due to higher tariffs, and the American consumer pays that.
And China, which imports literal boatloads of products like soybeans, has simply pivoted to other sources, like Brazil.
How is that working out for the American consumer? How is that working out for the American farmer?
Not good.
How, exactly, are these tariffs going to make US agriculture stronger? The tariffs on steel, copper and aluminum are raising prices on the equipment farmers need to buy.
Potash fertilizer, of which the US has little in the way of domestic sources, is imported from Canada and subject to a 25% tariff — which ultimately the farmers have to pay.
And that’s not the only fertilizer.
It seems as though the administration thinks that the US is the only country that “has all the cards” when it comes to trade.
But this case of soybeans shows that’s not the case.
The administration has shown that it is not a reliable partner (e.g., Trump crafted and signed USMCA, yet has essentially trashed it), so more countries will find other partners to work with.
In the short run, not good. And there has been no compelling argument as to why the long run is going to be any different for farmers, manufacturers or consumers.
Macaulay is pundit-at-large for The Hustings.