Trump Bails Out the Farmers He Kneecapped with Tariffs — Again

National Review Online

Tuesday, December 09, 2025

 

It’s becoming part of the Trump playbook.

 

It goes like this: (1) Farmers overwhelmingly vote for Donald Trump to be president. (2) Trump imposes enormous tariffs unilaterally, wrecking the export markets that farmers rely on to sell their crops at profitable prices. (3) Farmers lobby the Trump administration to give them money at taxpayers’ expense to cope with the effects of the same administration’s trade policy. (4) Trump bails out the farmers with billions of federal dollars and changes nothing about the tariffs that hurt them in the first place.

 

That looks a lot like what happened in President Trump’s first term, when his trade wars shrank U.S. agricultural exports by $27 billion in just a year and a half, from mid-2018 through 2019. After targeting China with tariffs, the PRC imposed retaliatory tariffs on the United States, hitting soybeans — America’s largest agricultural export — especially hard. Soybean prices collapsed in 2018, squeezing farmers’ incomes. To compensate for the losses that his trade war caused, the government doled out $23 billion in taxpayer funds to farms affected by foreign retaliation.

 

Now, the same process is unfolding once more. Trump announced on Monday a $12 billion aid package for farmers injured by his global trade war. This is bad policy to ameliorate the effects of prior bad policy.

 

Farmers have indeed had a terrible year. Crop prices have been depressed by the largest harvest on record, and farm bankruptcies have increased by nearly 50 percent since last year. But Trump’s tariffs have made farmers’ plight much worse, simultaneously driving crop prices down and input prices up.

 

Before this year, approximately one-quarter of U.S. soybean production — or 29 million metric tons per year — went to China. That number went to zero as China retaliated against Trump’s tariffs. In the fall, Trump claimed to have struck a trade deal with China in which it promised to buy 12 million metric tons of U.S. soybeans this year and 25 million each of the next three years — significantly less than what China was previously buying.

 

The deal was presented as a victory, with the United States having to ease tariffs and, critically, export controls on sensitive technologies to secure the agreement. But, just as in Trump’s first term, China has utterly failed to uphold its side of the bargain: It has purchased 20 percent of the soybeans it agreed to buy this year. Soybean prices have, consequently, fallen again since the deal was announced — but at least Trump got a press release.

 

As crimped export markets have caused a glut of corn and soybeans, tariffs have also raised the prices of crucial farm inputs such as fertilizer and machinery. Complicated duty schedules and trade-policy uncertainty have combined to tighten supply. The average tariff rate on agricultural inputs has risen from less than 1 percent at the beginning of the year to 9.4 percent. Tractors and herbicides each face an average 16 percent import tax. Seeds, agricultural machinery, and other pesticides all face average tariff rates above 10 percent.

 

The proper solution to farmers’ financial woes in 2025 is the same as it was in 2018: end the tariffs. Instead, the Trump administration has chosen to paint over the problem with a $12 billion bailout. So much for the tariffs’ supposed deficit reduction. That amount is on top of the $30 billion in federal payments that farmers already received this year in ad hoc disaster and economic aid, according to the Department of Agriculture, in addition to roughly $10 billion in regular crop-insurance subsidies.

 

Trump is using the Commodity Credit Corporation (CCC), a New Deal–era creation that can borrow up to $30 billion from the U.S. Treasury, to finance his bailout. It was designed to effectively socialize the agriculture sector during the Great Depression by artificially supporting crop prices. Because its statutory authority is so broad, presidents can effectively use the CCC to distribute money to farmers however they please. The CCC really ought to be abolished, but, short of that, Congress should drastically rein in its discretionary spending authority so that presidents quit exploiting it.

 

The alternative is to leave it as a piggy bank that can be raided to protect against the effects of flawed policy. Instead of selling their crops freely in a global marketplace, farmers have to stay on the dole. Taxpayers get stuck with the bill. The U.S. agriculture sector remains a tangled mess of the government’s haphazard design, distorted by countless subsidies, mandates, and trade restrictions.

 

This is command-and-control economics at its worst — something congressional Republicans once recognized.

 

Trump wants to have it both ways on agriculture, smacking farmers with one hand while paying them off with the other. If only the government would let farmers buy whatever inputs they need and sell crops to whomever they wish without inserting itself.