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 would change in a matter of weeks.
Lehman is bracing himself for the influence of a possible commerce struggle hatched in Washington that he says may lay low the US corn belt and irreparably hurt America’s standing with its neighbours.
“Farmers understand that trading relationships go up on a stairway, where you work hard to build them up, but go down on an elevator — very, very fast,” Lehman stated in the lounge of his farmhouse about 20 miles north of Iowa’s capital Des Moines.
“The long-term effect is that countries around the world will no longer see us as a reliable partner.”
It has been a turbulent week in US commerce coverage. 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 circulate of migrants and the illicit drug fentanyl into the US. Then after last-minute talks with the 2 nations’ leaders, he agreed to offer 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 imagine it is just 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 struggle has despatched a chill via 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 accordance with American Farm Bureau statistics.
All of a sudden, farmers have been dealing with the spectre of retaliatory tariffs and the prospect of a full-scale battle that some worry may 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 necessary buying and selling companions.
“We’ve gone from being a seller of choice to a seller of last 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.
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 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 trade is the backbone of the economy in the Midwest,” stated Ernie Goss, an economist at Creighton College in Omaha, Nebraska. “What we have here is some of the most productive agriculture on the face of the Earth, and the domestic market is not even close to being big enough to absorb all the commodities produced here. You have to have international markets.”
The newest volley of tariff threats has evoked painful recollections of the commerce struggle 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 reminiscent of Argentina and Brazil, which overtook the US as China’s prime provider of corn in 2023.
Within the final commerce struggle, “a lot of our Asian buyers started developing relationships with soyabean producers in South America, and they’ve taken more and more of our market”, stated Lehman, who can be president of the Iowa Farmers Union. “And we haven’t got it back.”
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 strategy he needed to use to . . . get those countries to the negotiating table,” 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 just four years to accomplish all he’s promised to do, so he’s got to get things going immediately to gain 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 forever for these things to happen, and they’ve only got 30 days,” he stated.
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. Internet farm earnings, a broad measure of income, was $181.9bn in 2022 however is projected to have been $140.7bn in 2024, in accordance with information from the US Division of Agriculture — a 23 per cent hunch.
“This [trade war] isn’t coming at a good time,” stated Rick Juchems, a farmer from close to Plainfield in north-east Iowa. “Commodity prices are low and the price of inputs like seed and fertiliser is going 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 got friends who’ve lost their jobs selling agricultural machinery because of reduced demand. The lots are full of unsold tractors.”
Makers of farm gear reminiscent of Deere, Kinze Manufacturing and Bridgestone/Firestone have shed tons 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 risk of import levies. Fertiliser, for instance, may 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 harmful impact of the tariff debate is the uncertainty it has triggered, simply forward of the essential spring planting season.
“We’ll get by as long as we know what’s coming,” stated Juchems. “But things are changing all the time. I’m sure the whole world is laughing at us.”
Lehman stated farmers have been attempting to remain optimistic. “They tell me they’re hopeful cooler heads will prevail and this dispute will result in good trade agreements,” stated Lehman. “But they’re also preparing for the worst.”
