KANSAS CITY, MO. — While the US election had a decisive winner, it’s still unclear how a second Donald Trump administration will impact the agriculture industry in the United States and abroad.

Agriculture was not front and center in this election cycle, and of his cabinet level positions, Trump named his nominee for US agriculture secretary last. But Trump repeatedly has said he plans to enact tariffs on imports, which has put the agriculture industry on alert for potential retaliation against its products.

“Trump’s return and the resulting policy shifts will create a complex landscape for global food and agricultural trade,” according to a new report from Rabobank titled Trump 2.0: Impacts on Global Food and Agriculture. “The implications of these changes include potential disruptions to established trade relationships, shifts in export demand and rising costs for consumers and businesses alike — highlighting the delicate balance that will shape inflation, consumer behavior and international trade dynamics going forward.”

Trump’s proposed universal tariff on US imports and a potential 60% import tariff on Chinese goods likely would result in retaliatory tariffs by China and other affected countries. These measures, along with the expected strength of the US dollar, will have a negative impact on US food and agriculture exports, according to the report.  

“The extent of the impact depends on the breadth and the ultimate tariff levels applied in the US, which will determine the severity of the retaliation,” said Roland Fumasi, head of RaboResearch Food & Agribusiness-North America, and the report’s lead author. 

Globally, Brazil could again benefit from an escalation of a US-China trade war while Europe, Africa and Southeast Asia could see limited, manageable negative impacts depending on the level of trade disruption and the adaptability and flexibility of specific value chains, he said. 

It is possible to look back at Trump’s first term to make an educated guess on what the future might hold. But as a second-term president, Trump won’t have re-election in mind when creating policies. Trump learned from his first term and understands the levers of government better and where the pressure points are, said Stephen Nicholson, executive vice president, global sector strategist-grains and oilseeds, Rabobank.

“He’s going to bring people into his administration who have not been mainstream Republicans but are very loyal to him and his policies,” he said. “You worry about whether the new administration would be a lot more ideological.”

Trump nominated on Nov. 24 former aide Brooke Rollins to lead the US Department of Agriculture (USDA). Rollins is currently president and chief executive officer of the America First Policy Institute, a nonprofit think tank formed in 2021 to promote Trump’s public policy agenda. She also served as the director of the Domestic Policy Council and assistant to the president for strategic initiatives in Trump’s first presidential term.

Rollins has a juris doctorate from the University of Texas School of Law and a degree in agricultural development from Texas A&M University. She is originally from Glen Rose, Texas, and was a member of the National FFA Organization growing up.

The National Grain and Feed Association said it worked well with the first Trump administration and looks forward to working with the second one once the team is in place. 

“Trump has indicated tax reform, trade and immigration are early top issues for him,” said Stephanie See, vice president of legislative and public affairs for the NGFA. “NGFA is closely watching developments on these issues, as well as progress on the next farm bill and Water Resources Development Act.”

In his first term, during the trade war with China, Trump gave farmers a lot of money to offset their losses as exports to China plummeted.

“He doesn’t have the same incentive to do that this time because he doesn’t have to get the votes the second time around,” Nicholson said.  

Trade and tariffs

Trump vowed to be even more assertive with China this time around, calling for 60% tariffs across the board on Chinese goods. Since 2018, after Trump set tariffs on $30 billion of Chinese goods and China retaliated, the US share of Chinese soybean imports dropped to 18% from 40%.

At the same time, Brazil’s share has grown to 76% from 46%, according to Chinese customs data. China also has purchased more soybeans from Argentina, Ukraine and Australia.  

With more Trump tariffs, the United States can expect additional retaliation from China, with agricultural products at the top of the list, Nicholson said. Some economists say overall US-China trade could plunge an additional 70% from the already reduced levels.

“Within our wheat, corn and soybean business, everybody is on pins and needles for tariffs,” said Jeff Van Pevenage, CEO of Columbia Grain International (CGI), in an interview with MEAT+POULTRY sister publication World Grain. “What will happen with China, particularly for us in the Pacific Northwest? The tariffs in place from China against the US (in 2019) was really detrimental to the export industry here.” 

But he noted that the tariffs against China remained in place through the Biden administration and there was no further retaliation from China. CGI, based in Portland, Oregon, US, is a supplier of bulk grain, pulses, edible beans and oilseeds with a supply chain network of 8,000 farmers across the northern tier of the United States. 

“I believe we will probably see 90 to 180 days where we’re going to be looking at more negotiations and diplomacy before bringing on any worse tariffs against China in the US,” Van Pevenage said. “Through the next six months, I suspect it will be relatively normalized export trade for US agriculture.”

The impact on US agriculture is hard to gauge, said Tanner Ehmke, lead grain and oilseed economist for CoBank, because the extent of the tariffs and possible retaliation is unknown.

“The Chinese are sitting on a record stockpile of soybeans, so that gives them leverage in trade negotiations,” Ehmke said. “At the same time, they’re leaning more on Brazil. Perhaps they don’t necessarily need much retaliation with the US, when they’re already moving away from the US and have their needs met for the near term.”

There’s not much preparation to be done ahead of time, Van Pevenage said, but CGI will be looking for different markets. If more Brazilian soybeans are going to China, there’s someone else in the world not getting Brazilian soybeans, he said. 

“The US will have to replace those,” he said. “It can still hurt sectors or regions of the ag industry because maybe there’s more exports out of the Gulf and less out of the Pacific Northwest.”

It’s important to build relationships and know the buyers of the world, Van Pevenage said. 

“But markets are going to dictate pricing,” he said. “The infrastructure is generally in place, although it’s challenged in Mexico and the Mississippi River at times. In the northern tier, we’ve got good infrastructure set up. We’ve got more capacity than we need in exporting, but if we have to go in different directions, it gets less efficient.”

While risk to the US-China soybean trade is the biggest concern, all US food and agriculture trade categories could be negatively impacted by trade war escalation, Fumasi said. Rabobank identified products such as coarse grains and corn, for which 10% or more of their export value has been to China over the past 60 months. 

Other trade concerns for the agriculture industry are the United States-Mexico-Canada agreement (USMCA), which is up for renegotiation in two years, and overall relations with Mexico and Canada, two of the United States’ largest trading partners. 

On Nov. 25, Trump said he would sign an executive order putting a 25% tariff on all goods from Canada and Mexico until illegal drugs and people stop coming over the borders. Immigration movement across the border has hurt the efficiency of the railroads, Van Pevenage said.

“That needs to be addressed because when the efficiency of US trains going to Mexico is hurt, it hurts everywhere because rail freight becomes much tighter in supply,” he said. 

Fumasi said a 100% tariff on Chinese electric vehicles imported from Mexico seems likely, which could complicate relations with Mexico. 

“The outcome is hard to predict but would likely result in initial retaliatory tariffs from Mexico, followed by some creative, additional trade concessions given to Mexico,” Fumasi said. 

Unscientific policies, such as Mexico’s genetically modified corn ban, need to be addressed, according to the American Feed Industry Association (AFIA). 

Given Trump’s interest in holding trading partners accountable, the AFIA said it expects to see progress on expanding the presence of US animal food goods abroad, said Constance Cullman, president and CEO of the AFIA.

“We also encourage the president to take measured action toward foreign suppliers where alternative suppliers simply do not exist, such as single foreign suppliers of key vitamins, minerals and amino acids,” she said.

Global impacts

From a global perspective, the Trump administration is more chaotic, Nicholson said, and brings a lot of uncertainty.

“The uncertainty of the US and its action does give a lot of our international allies, businesses and enemies, a lot of indigestion on a daily basis,” he said. “Markets and business, at best, want certainty rather than upheaval. With Trump, there is a lot more uncertainty, and policies could change more quickly.”

In a second term, the guardrails tend to come off, Ehmke said.

“Trump believes in trade protectionism to the core,” he said. “He’s been saying these statements for decades; he’s not kidding. I think he probably feels like he has unfinished business with China and Mexico.”

Brazil could experience both opportunities and challenges from a second Trump administration, impacting export volumes, prices and market access, Fumasi said. Tensions between the United States and China could increase Brazil’s exports of soybeans and corn to China. It also could see more opportunities to export beef and pork to China.

“Increased exports of Brazilian soybeans and corn could push local logistics closer to full capacity, raising internal freight costs,” he said. 

Brazil will have to carefully balance its trade relationships with China and the United States, he said. 

In Europe, tariffs could have minimal impact on some products, but noticeable increases for others. European exporters could absorb the costs, reduce their focus on the US market or localize production in the United States, Fumasi said. If the United States imposed 20% tariffs or introduced non-tariff barriers such as stringent regulatory requirements, this could drastically alter the landscape for European exporters. 

“While we see this as a less likely scenario, it is something to watch,” Fumasi said.

Under such a scenario, European companies could significantly reduce exports to the United States and impose retaliatory measures, escalating into a broader trade conflict.

A stronger US dollar and decreased US competitiveness in global markets would benefit Australian and New Zealand grain, oilseed, dairy and beef exports, Fumasi said. But increased US import tariffs on countries with large trade surpluses with the United States would create negative economic pressure on those exporters because they rely heavily on exporting to the United States.