Aaron Lehman’s soyabean farm within the heartland of Iowa seems like an oasis of calm within the turbulence and tumult of President Donald Trump’s second time period. But all that would change in a matter of weeks.
Lehman is bracing himself for the influence of a possible commerce warfare hatched in Washington that he says may lay low the US corn belt and irreparably hurt America’s standing with its neighbours.
“Farmers perceive that buying and selling relationships go up on a stairway, the place you’re employed onerous to construct them up, however go down on an elevator — very, very quick,” Lehman mentioned in the lounge of his farmhouse about 20 miles north of Iowa’s capital Des Moines.
“The long-term impact is that international locations world wide will not see us as a dependable associate.”
It has been a turbulent week in US trade policy. Trump introduced final weekend that he would impose 25 per cent tariffs on Mexico and Canada, saying they weren’t doing sufficient to stem the stream of migrants and the illicit drug fentanyl into the US. Then after last-minute talks with the 2 international locations’ leaders, he agreed to provide them each a 30-day reprieve.
The identical was not the case for China. The ten per cent levy he imposed on all Chinese language imports nonetheless stands. And plenty of in Iowa consider it’s only a matter of time earlier than the tariffs on America’s northern and southern neighbours are reinstated.
The opening salvo of a brand new commerce warfare has despatched a chill by means of the Midwest. Canada, Mexico and China collectively account for half of all American agricultural exports. Simply final 12 months, the US bought greater than $30bn in farm merchandise to Mexico, $29bn to Canada and $26bn to China, in line with American Farm Bureau statistics.
Instantly, farmers have been going through the spectre of retaliatory tariffs and the prospect of a full-scale battle that some concern may decimate America’s rural heartland.
Farmers in an space of the nation that has develop into a bedrock of assist for Trump now fear that the president’s tariffs, although suspended on the final minute, have completely broken the picture of the US within the eyes of its most essential buying and selling companions.
“We’ve gone from being a vendor of option to a vendor of final resort,” mentioned Mark Mueller, a farmer from close to Waterloo in north-east Iowa.
Few US states higher embody the agricultural wealth of the Midwest than Iowa. It’s a land of huge corn fields stretching so far as the attention can see, the panorama damaged by the occasional grain silo, hay bale or low-slung barn. Hogs outnumber individuals greater than seven to 1.
It is usually Trump nation. Though Iowa voted for Democratic presidents Invoice Clinton and Barack Obama, it backed Trump in 2016, 2020 and 2024 in ever higher numbers.
Greater than a fifth of Iowa’s financial system — or $53.1bn — is tied to agriculture, from crop and livestock manufacturing to meals processing and manufacturing. It’s the nation’s largest producer of corn, hogs, eggs and ethanol and a top-three grower of soyabeans. That makes it significantly weak to any downturn in agricultural exports.
“Free commerce is the spine of the financial system within the Midwest,” mentioned Ernie Goss, an economist at Creighton College in Omaha, Nebraska. “What we’ve got right here is a few of the most efficient agriculture on the face of the Earth, and the home market shouldn’t be even near being large enough to soak up all of the commodities produced right here. You must have worldwide markets.”
The newest volley of tariff threats has evoked painful recollections of the commerce warfare unleashed by Trump in his first time period. Among the many most placing strikes was Trump imposing duties on $300bn of Chinese language items. Beijing responded in 2018 by slapping 25 per cent tariffs on imports of US soyabeans, beef, pork, wheat, corn and sorghum.
The skirmish ended with the international locations signing a commerce deal in 2020 beneath which Beijing pledged to extend its purchases of US items and providers. However since then, it has been shopping for extra grain from international locations similar to Argentina and Brazil, which overtook the US as China’s high provider of corn in 2023.
Within the final commerce warfare, “lots of our Asian consumers began creating relationships with soyabean producers in South America, and so they’ve taken increasingly more of our market”, mentioned Lehman, who can be president of the Iowa Farmers Union. “And we haven’t received it again.”
Not all of Iowa’s farmers oppose the way in which Trump has used the specter of tariffs to attain a key coverage goal — stemming unlawful immigration.
“It was a technique he wanted to make use of to . . . get these international locations to the negotiating desk,” mentioned Steve Kuiper, a fourth-generation Iowa farmer who grows corn and soyabeans in Marion County, south-east of Des Moines. In any case, “a president has simply 4 years to perform all he’s promised to do, so he’s received to get issues going instantly to achieve traction”.
Nonetheless, he’s pessimistic that Mexico and Canada will be capable to ship on their pledges to Trump to strengthen border safety in time. “It takes perpetually for this stuff to occur, and so they’ve solely received 30 days,” he mentioned.
The prospect of one other spherical of commerce tensions comes with American farmers already in a decent spot, hit by a fall in crop costs and better prices. Web farm revenue, a broad measure of income, was $181.9bn in 2022 however is projected to have been $140.7bn in 2024, in line with knowledge from the US Division of Agriculture — a 23 per cent hunch.
“This [trade war] isn’t coming at a superb time,” mentioned Rick Juchems, a farmer from close to Plainfield in north-east Iowa. “Commodity costs are low and the worth of inputs like seed and fertiliser goes up.” Sources from the Iowa Corn Growers Affiliation mentioned many farmers had been producing at a $100 per acre loss.
Investments in new gear are down, reflecting the broader downturn, mentioned Juchems. “I’ve received buddies who’ve misplaced their jobs promoting agricultural equipment due to lowered demand. The heaps are stuffed with unsold tractors.”
Makers of farm gear similar to Deere, Kinze Manufacturing and Bridgestone/Firestone have shed lots of of jobs in Iowa since final 12 months.
But the prospects for farm funds may get even gloomier if Trump makes good on his menace of import levies. Fertiliser, for instance, may develop into rather more costly, since greater than 80 per cent of the US’s provide of potash — a key ingredient — comes from Canada.
However maybe probably the most damaging impact of the tariff debate is the uncertainty it has triggered, simply forward of the essential spring planting season.
“We’ll get by so long as we all know what’s coming,” mentioned Juchems. “However issues are altering on a regular basis. I’m certain the entire world is laughing at us.”
Lehman mentioned farmers have been making an attempt to remain optimistic. “They inform me they’re hopeful cooler heads will prevail and this dispute will lead to good commerce agreements,” mentioned Lehman. “However they’re additionally getting ready for the worst.”
