With Donald Trump soon to be back in the White House, the U.S. agriculture industry is preparing for a mix of policy shifts that will impact farmers, consumers and workers. Trump’s return signals a likely revival of his aggressive international trade policies, changes to labor, potential reductions food assistance programs and a focus on reshaping agricultural regulations. While the largest companies might benefit from direct financial aid, the broader economic impact due to these policy shifts should raise concerns for most farmers across the food and agriculture sector.
Impacts on Farmers: A Return to Tough Trade Tactics
Trump’s second term could mean a resurgence of aggressive trade policies, with the proposal of a universal 10% tariff on all imports and a possible 60% tariff on Chinese goods. These tariffs would be the highest since World War II and could cause retaliatory measures from trading partners.
During Trump’s first term, tariffs on China impacted key American crops, like soybeans and corn. The USDA said the dispute led to more than $27 billion in U.S. agricultural losses. Similar tariffs led to a steep decline in agricultural exports to China. This forced farmers to rely on $61 billion in government finding to compensate agriculture companies for the cost of the trade war Trump started.
Key concerns for farmers include:
- Export Challenges: U.S. agriculture, heavily reliant on exports, could face reduced access to global markets as trading partners impose retaliatory tariffs.
- Commodity Price Volatility: Tariff-driven trade disputes may disrupt commodity prices, creating uncertainty in markets for soybeans, corn, and livestock.
- Rising Input Costs: Higher tariffs on imported goods may increase costs for farm equipment, fertilizers, and other essentials.
On the domestic front, labor costs—already accounting for 15% of farm expenses—are expected to rise. Stricter immigration policies could reduce the availability of undocumented workers, who currently make up nearly half of the agricultural labor force. Labor shortages may force farms to increase wages, further straining profitability.
Trade Impacts:
- Retaliatory Tariffs: During Trump’s first term, retaliatory tariffs from China resulted in billions in losses for American farmers. The soybean industry, in particular, was hard-hit, with exports to China dropping by over 75%.
- Export Market Challenges: Farmers may face reduced access to global markets, forcing a reliance on domestic sales, which could depress commodity prices.
Economic Ramifications:
- Input Costs: Tariffs on imported goods could raise prices for essential farm equipment, seeds, and fertilizers.
- Aid Distribution: While Trump previously allocated $61 billion in aid to offset trade war losses, these payments disproportionately benefited large-scale farms. Smaller farmers received an average of $2,469, while the top 10% received over $164,000.
Another trade war could cost soy farmers $3.6 billion to $5.9 billion in annual production value, depending on how the dispute plays out, according to an October study from the National Corn Growers Association and American Soybean Association.
The Impact on Consumers: Food Prices and Assistance Programs
For consumers, the combination of trade policies, labor shortages and inflationary pressures is likely to drive higher food prices. Retaliatory tariffs on U.S. agricultural goods could also limit domestic supply, while higher input costs for farmers may lead to increased prices at the grocery store.
Trump’s previous term saw efforts to cut Supplemental Nutrition Assistance Program (SNAP) benefits by $180 billion and reduce funding for school meal programs by $50 million. Similar reductions in food assistance programs could have far-reaching effects, particularly for the 44 million Americans currently facing hunger, including one in five children.
Additionally, Project 2025, a conservative policy blueprint for Trump’s second term, advocates for dividing the Farm Bill. By separating food assistance programs like SNAP from farm subsidies, the plan risks reducing bipartisan support for both initiatives, potentially slashing funding for crucial programs.
Food Prices:
- Tariff-driven disruptions to the supply chain may increase prices for basic commodities.
- Higher production costs due to increased labor expenses and input prices are likely to be passed on to consumers.
Food Assistance Cuts:
- Trump’s previous attempts to cut SNAP benefits by $180 billion would have reduced food aid for millions of Americans. If similar cuts are enacted, vulnerable populations, including the 44 million Americans facing food insecurity, will face even greater challenges.
- Additional proposals, such as separating food aid from farm subsidies in the Farm Bill, could jeopardize funding for nutrition assistance programs.
Farm Workers and Regulatory Changes
Farm workers face significant uncertainty under Trump’s renewed policies. The strict enforcement of immigration laws could lead to deportation of undocumented workers, exacerbating labor shortages and increasing costs for farm operations.
Labor costs currently comprise about 15 percent of a farmer’s costs, and that number is on the rise, according to the USDA. Almost half of the labor force on farms is undocumented. If many of those workers are deported, without a ready and willing supply of hands, the price of food will likely continue to surge.
Regulatory changes are also expected to shift priorities at the USDA. Critics argue that Trump’s consolidation of regulatory oversight in his first term weakened protections for smaller farms and agricultural workers. Moving forward, a reduced emphasis on environmental and labor regulations may prioritize corporate interests over the needs of smaller producers and farm laborers.
Labor Shortages:
- Nearly half of all farmworkers are undocumented, and mass deportations or restrictive visa policies could leave farms without the workforce needed to maintain operations.
- Labor costs, already comprising 15% of a farm’s expenses, would likely rise as farms compete for fewer available workers, driving up food production costs.
Regulatory Changes:
- Critics argue that Trump’s consolidation of oversight bodies during his first term weakened protections for farmworkers. Further deregulation may reduce workplace safety and legal protections.
Subsidies & Trade Imbalance
Despite the challenges, Trump’s presidency may also offer some opportunities:
- Direct Aid: Trump has a history of delivering financial relief to farmers. During the COVID-19 pandemic, federal payments accounted for nearly half of farmers’ incomes, though critics note that larger farms benefited disproportionately.
- Export Opportunities Beyond China: Trump’s policies may push U.S. agriculture to diversify export markets, reducing reliance on China and exploring trade deals with other regions.
Environmental and Regulatory Concerns
Trump’s approach to environmental regulations also raises questions about sustainability in agriculture. During his first term, environmental oversight was rolled back, with critics citing weakened protections for soil health, water quality, and climate resilience. A second term could see further reductions in funding for conservation programs, impacting long-term agricultural sustainability.
Challenges:
- Aid distribution in the past has favored large-scale operations, leaving smaller farms at a disadvantage.
- Without comprehensive labor reform or alternative workforce solutions, labor shortages could remain a persistent issue.
The Road Ahead
A second Trump term introduces a complex mix of impacts and challenges for the U.S. agricultural sector. While some farmers may benefit from direct aid and market diversification efforts, many others face the potential fallout of trade wars, labor shortages, and reduced food assistance funding. For agricultural workers and consumers, stricter immigration policies and higher food costs may create significant hurdles. As these policies unfold, stakeholders must advocate for balanced, equitable solutions to ensure a sustainable and resilient food system.
As these policies take shape, all stakeholders—farmers, consumers, and workers—must remain vigilant and engaged to navigate the evolving agricultural landscape under Trump’s leadership.
