Aaron Lehman’s soyabean farm within the heartland of Iowa appears like an oasis of calm within the turbulence and tumult of President Donald Trump’s second time period. But all that might change in a matter of weeks.
Lehman is bracing himself for the impression of a possible commerce battle hatched in Washington that he says might 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 laborious to construct them up, however go down on an elevator — very, very quick,” Lehman stated in the lounge of his farmhouse about 20 miles north of Iowa’s capital Des Moines.
“The long-term impact is that nations around the globe will not see us as a dependable companion.”
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 move of migrants and the illicit drug fentanyl into the US. Then after last-minute talks with the 2 nations’ leaders, he agreed to present 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 lots 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 battle has despatched a chill by means of the Midwest. Canada, Mexico and China collectively account for half of all American agricultural exports. Simply final yr, the US offered greater than $30bn in farm merchandise to Mexico, $29bn to Canada and $26bn to China, in line with American Farm Bureau statistics.
All of the sudden, farmers have been going through the spectre of retaliatory tariffs and the prospect of a full-scale battle that some worry might decimate America’s rural heartland.
Farmers in an space of the nation that has develop into a bedrock of help 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 vital buying and selling companions.
“We’ve gone from being a vendor of option to a vendor of final resort,” stated 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 at least one.
Additionally it is Trump nation. Though Iowa voted for Democratic presidents Invoice Clinton and Barack Obama, it backed Trump in 2016, 2020 and 2024 in ever better numbers.
Greater than a fifth of Iowa’s economic 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 notably weak to any downturn in agricultural exports.
“Free commerce is the spine of the economic system within the Midwest,” stated Ernie Goss, an economist at Creighton College in Omaha, Nebraska. “What we have now right here is among the best agriculture on the face of the Earth, and the home market will not be even near being sufficiently big to soak up all of the commodities produced right here. You must have worldwide markets.”
The most recent volley of tariff threats has evoked painful recollections of the commerce battle unleashed by Trump in his first time period. Among the many most putting 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 nations signing a commerce deal in 2020 underneath which Beijing pledged to extend its purchases of US items and companies. However since then, it has been shopping for extra grain from nations equivalent to Argentina and Brazil, which overtook the US as China’s prime provider of corn in 2023.
Within the final commerce battle, “lots of our Asian consumers began growing relationships with soyabean producers in South America, they usually’ve taken an increasing number of of our market”, stated Lehman, who can also be president of the Iowa Farmers Union. “And we haven’t bought it again.”
Not all of Iowa’s farmers oppose the best way 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 nations to the negotiating desk,” stated Steve Kuiper, a fourth-generation Iowa farmer who grows corn and soyabeans in Marion County, south-east of Des Moines. In spite of everything, “a president has simply 4 years to perform all he’s promised to do, so he’s bought to get issues going instantly to achieve traction”.
Nonetheless, he’s pessimistic that Mexico and Canada will have the ability to ship on their pledges to Trump to strengthen border safety in time. “It takes endlessly for these items to occur, they usually’ve solely bought 30 days,” he stated.
The prospect of one other spherical of commerce tensions comes with American farmers already in a good 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 great time,” stated 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 stated many farmers had been producing at a $100 per acre loss.
Investments in new gear are down, reflecting the broader downturn, stated Juchems. “I’ve bought pals who’ve misplaced their jobs promoting agricultural equipment due to diminished demand. The tons are filled with unsold tractors.”
Makers of farm gear equivalent to Deere, Kinze Manufacturing and Bridgestone/Firestone have shed tons of of jobs in Iowa since final yr.
But the prospects for farm funds might get even gloomier if Trump makes good on his risk of import levies. Fertiliser, for instance, might develop into far more costly, since greater than 80 per cent of the US’s provide of potash — a key ingredient — comes from Canada.
However maybe essentially 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,” stated Juchems. “However issues are altering on a regular basis. I’m certain the entire world is laughing at us.”
Lehman stated 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,” stated Lehman. “However they’re additionally making ready for the worst.”
