Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Kelly Lester.
- Pres. Donald Trump's 2025 tariffs are repeating the economic damage of the 2018 trade war, slashing U.S. farm exports, especially soybeans and pork, and driving up input costs for farmers
- North Carolina farmers are being hit particularly hard, with canceled Chinese orders, rising equipment prices, and new burdens on sectors like pork and Christmas trees
- Government bailouts are once again being discussed, but they're a costly Band-Aid for a crisis caused by trade policy itself
In 2018, American farmers were blindsided by a trade war they didn't start that resulted in federal bailouts for farmers with a total price tag to taxpayers of $28 billion. That year, President Donald Trump imposed sweeping tariffs on Chinese imports and foreign steel and aluminum. China retaliated by slashing soybean imports from the U.S., devastating one of America's largest farm exports.
This year, Trump is again wielding tariffs as a blunt political weapon - most recently with a 50 percent levy on steel and aluminum and a
"reciprocal tariff" policy of 10-25 percent on imports from key partners like China, Canada, and Mexico. The economic results are déjà vu with soy and pork exports dramatically down again. And for farmers in North Carolina and beyond, the costs are piling up.
The 2018 trade war
In 2018, China retaliated against U.S. tariffs by slapping 25 percent tariffs on American soybeans, cutting off what had been the crop's largest foreign market. The results were immediate and devastating. U.S. soybean exports to China dropped by 65 percent, and North Carolina - though not the nation's largest soybean producer - was hit especially hard due to its integrated supply chain of soy-fed pork and poultry.
Pork producers didn't fare much better. China's tariffs on American pork led to massive declines in exports just as the Chinese market was beginning to boom due to domestic swine flu outbreaks. North Carolina, the third-largest pork-producing state in the U.S., was directly impacted. Processors, truckers, and feed suppliers all felt the blow.
The federal government responded with a massive bailout of $28 billion between 2018 and 2020. But even that wasn't enough. There is evidence that large agribusinesses received the lion's share of the aid, while many family-run farms received pennies on the dollar. Also, the payments couldn't restore lost market access or undo the long-term damage. U.S. soybean market share in China still has not fully recovered, with Brazilian and Argentinian producers swooping in to fill the gap.
Higher tariffs in 2025
In April, the Trump administration imposed a new round of sweeping tariffs - 10 percent across the board, rising to 25-50 percent on countries with trade surpluses with the U.S. (exporting more to the U.S. than importing U.S. goods). Days later, steel and aluminum tariffs doubled from 25 percent to 50 percent. That's already raising prices on everything from tractors to food cans.
In response, China canceled almost all U.S. soybean purchases in a single week. A 12,000-ton shipment of pork bound for Chinese markets was also scrapped. North Carolina pork producers are once again caught in the blast radius. Orders are vanishing. Margins are shrinking. The same communities hurt in 2018 are bracing for another round of pain.
The Can Manufacturers Institute warned that higher tin and aluminum prices will raise the cost of canned goods across grocery aisles. This means that pantry-staple products like cans of soup aren't going to be as cheap anymore. Tractors and other farm machinery are also a problem. For a state like North Carolina, whose farmers not only produce meat but rely on steel-intensive farm equipment, this compounds the harm. Christmas tree growers, still reeling from $125 million in damages from Hurricane Helene, now face rising prices on the equipment and fuel needed to bring trees to market.
The irony of bailing out a self-inflicted wound
In March, Agriculture Secretary Brooke Rollins announced $10 billion in direct payments to farmers. She even said the administration is
"prepared to execute something similar" to the 2018 bailouts, stating,
"We can't reinvent the wheel."
But that's the problem.
These bailouts are not relief - they're compensation for self-inflicted wounds. Without the tariffs, farmers wouldn't need emergency cash infusions. They'd be selling soybeans, pork, and poultry in the open market, not waiting on checks to replace canceled orders.
Worse, as mentioned earlier, these payments often come too late and with uneven distribution. A Government Accountability Office report found that massive agribusinesses received most of the previous bailout funds. Small farms in North Carolina, especially in counties where diversification is limited, didn't get enough to make up for their losses.
Even before foreign countries respond, tariffs hurt farmers through higher input costs. The U.S. imports steel, aluminum, and potash (used in fertilizer) from countries like Canada and Mexico. When tariffs are placed on those materials, the price of tractors, irrigation systems, grain bins, and fertilizer all increase.
American farmers are globally competitive. North Carolina pork, poultry, sweet potatoes, and soybeans are in demand around the world. But repeated tariff shocks, both in 2018 and now in 2025, have made U.S. producers look less stable. In response, foreign buyers, like those in China, have signed long-term contracts with producers in Brazil, Australia, and the EU.
A smarter path forward
North Carolina farmers don't need tariffs. They need access to markets.
They also need immigration and labor reforms that help them harvest what they grow. They need investment in trade relationships - not barriers. They need reliable supply chains for the equipment and inputs that keep their operations running. That means reviving trade relationships damaged by years of trade wars and tariff brinkmanship. Congress and the White House should move toward new bilateral and multilateral agreements, re-enter negotiations like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and restore trust with key trading partners like China and Mexico by reducing retaliatory incentives.
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