USDA cuts commodity support as retaliatory tariffs hit farm exports

President Trump imposed tariffs on Chinese imports in phases beginning February 2025, starting at 10% and escalating to 20%, while simultaneously levying 25% tariffs on goods from Canada and Mexico. China retaliated with tariffs of 125% on broad categories of U.S. goods, and specifically targeted farm exports with duties of 125% on soybeans and 80% on pork. Between June 2024 and June 2025, U.S. agricultural exports to China fell 39%, eliminating nearly $10 billion in sales from a market that had purchased $26 billion in U.S. farm products in 2024.

Soybean farmers absorbed the heaviest losses. China shifted nearly all its purchases to Brazil, which by mid-2025 supplied 93% of China's soybean imports. U.S. soybean exports to China fell by over 72% in volume, costing farmers $2.7 billion in the first eight months of 2025 alone. Pork exports tanked 72% in a single week after the steepest tariffs took effect. Illinois, Iowa, and Nebraska, which send the largest shares of their output overseas, faced compounding losses from both the export collapse and falling domestic commodity prices.

Secretary of Agriculture Brooke Rollins canceled the Partnerships for Climate-Smart Commodities (PCSC) program on April 14, 2025, terminating $3.1 billion in grants that had enrolled 14,000 farms implementing climate-smart practices on 3.2 million acres. Rollins said the Biden-era program had 'sky-high administration fees' and sent less than half its funding directly to farmers. A replacement program, the Advancing Markets for Producers (AMP) initiative, requires at least 65% of federal funds to reach producers directly.

Critiques from agricultural organizations and climate researchers pointed out that canceling mid-program grants left many farms scrambling to absorb costs for regenerative practices, soil testing, and cover crops they had already implemented. Some projects received termination letters weeks after the policy shift, with no transition period. Civil Eats reported that some projects with strong producer-payment ratios still received cancellations because the new criteria were applied retroactively.

The Trump administration also moved to eliminate Food for Peace, the 70-year-old international food aid program managed by USDA. The fiscal year 2027 budget proposed rescinding $1.2 billion from Food for Peace and $240 million from the McGovern-Dole Food for Education program, calling them wasteful. Congress had long protected these programs because they purchase U.S. farm commodities for overseas distribution, providing a secondary export market for American grain. Farm Policy News reported the 2027 budget proposes cutting total USDA funding by $4.9 billion.

Staffing at the Farm Service Agency (FSA) fell from 8,135 employees in fiscal year 2025 to 7,320 in 2026, with the 2027 budget calling for further reductions to 6,009 staff, a 26% cut over two years. The Natural Resources Conservation Service (NRCS) lost 2,301 positions in the same period. Both agencies process farm loan applications, disaster payments, conservation easements, and crop insurance claims. Farmers in rural counties with a single FSA office reported delays of weeks or months in processing emergency assistance.

On December 8, 2025, the Trump administration announced the $12 billion Farmer Bridge Assistance (FBA) Program to compensate farmers for market disruptions caused by the trade war. Up to $11 billion of the total would flow through the FBA program, with the remainder through supplemental commodity support. NPR reported the payments were structured as one-time grants rather than ongoing support, and were designed to cover market losses from what USDA called 'unfair trade practices by foreign competitors.'

Farm advocacy groups welcomed the announcement but questioned its adequacy. The 🏛️American Farm Bureau Federation noted that losses from the China trade war alone had exceeded $26 billion in foregone 2024 exports. The $12 billion package, spread across all commodity producers nationally, averaged far less per farm than the income disruption caused by the tariff escalation. The payments also came nine months after the initial tariff hikes, leaving many farmers who had already sold their 2025 crops at depressed prices with no recovery mechanism.

The One Big Beautiful Bill Act, passed by Congress in July 2025, reshaped federal farm support in ways that primarily benefited large commercial operations. The legislation raised the annual commodity payment limit from $125,000 to $155,000 per farmer, with future adjustments indexed to inflation. Reference prices, which trigger support payments when market prices fall below a floor, rose between 10% and 21% depending on the crop. Corn's reference price increased from $3.70 per bushel to $4.10 per bushel.

The Congressional Budget Office estimated the agricultural provisions would add $65.6 billion in spending over ten years. The American Enterprise Institute found the higher reference prices and payment limits primarily benefited large, commodity-intensive farms rather than small diversified operations. Farmers who earn at least 75% of their income from farming, ranching, or related activities became eligible for exemptions from income-based program eligibility caps.

China's tariff strategy in 2025 deliberately exploited the geographic concentration of Trump's political base. Soybean and pork production is concentrated in Midwestern states that voted heavily for Trump in 2024. By targeting these specific commodities, China applied maximum political pressure on rural districts whose congressional delegations support the administration. The American Farm Bureau Federation's market analysis showed Brazil captured market share that U.S. producers may struggle to reclaim even after tariffs are reduced.

U.S. agricultural exports fell 65.7% year-on-year to $8.4 billion in 2025 at their lowest point, as China systematically signed long-term supply contracts with Brazilian exporters and upgraded Brazilian port infrastructure. The CSIS noted that trade relationships are not easily restored after market share losses, and that Chinese importers had built new supply chains specifically to avoid dependence on U.S. grain.

The USDA cuts to climate and conservation programs came as the agency also reduced local food purchase programs by $1.1 billion. Programs that bought locally produced food for school lunches, food banks, and tribal nutrition programs were eliminated or sharply reduced. Rollins framed the cuts as eliminating 'DEI-adjacent' spending and redirecting funds to commodity farmers. Critics, including Rep. Chellie Pingree, the ranking Democrat on the House Agriculture Appropriations Subcommittee, argued the cuts harmed small and mid-size farms that depend on local markets.

The 15,000 USDA employees who left the agency through Deferred Resignation and early retirement programs by May 2025 included many county-level staff who processed loans and disaster payments. Farmers in states with high disaster frequency, including Kansas, Nebraska, and Texas, reported waiting 60 to 90 days for emergency loan processing that previously took two to three weeks.

The Farmer Bridge Payments announced in December 2025 followed an earlier Trump administration precedent. During the 2018-2019 trade war, the administration paid $28 billion in Market Facilitation Program (MFP) payments to farmers hurt by Chinese retaliatory tariffs, a figure that exceeded the cost of the 2009 auto industry bailout. The 2025 payments of $12 billion, while substantial, were proportionally smaller relative to documented farm losses.

Economists at Iowa State University's Center for Agricultural and Rural Development noted that direct payments do not restore export relationships or rebuild long-term market access. Brazil's success in capturing China's soybean market during the 2018 trade war permanently reduced U.S. market share, a pattern the 2025 escalation was repeating at larger scale. The AEI analysis found that per-acre returns in corn and soybean production remained below 2022 peaks despite the bridge payments.

USDA cuts commodity support as retaliatory tariffs hit farm exports

Trump imposes a 10 percent tariff on all Chinese imports

Trump imposes a 10 percent tariff on all Chinese imports

China levies retaliatory tariffs on US farm exports