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In the days after signing an executive order delaying the implementation of reciprocal tariffs until Aug. 1 and sending 14 letters to countries warning them of new tariff rates, President Donald Trump has continued to release letters informing countries of new tariffs. On the platform Truth Social, Trump released letters sent to seven more U.S. trade partners on Wednesday.
Wednesday evening, Trump announced a 50% tariff on imports from Brazil. Thursday evening, Trump threatened 35% duties on imports from Canada that fall outside of the United States-Mexico-Canada Agreement.
Markets were lower in the wake of increased tariff uncertainty early in the week, and on Tuesday, 42 farm organizations called for the Trump administration to appoint a Chief Ag Negotiator for the Office of the U.S. Trade Representative.
The impact of “kicking the can down the road” will have an impact on farmers who are waiting to sell 2024 crops and those trying to plan for selling 2025 crops, said Iowa State University ag economist Chad Hart.
“I hate to say it, but it’s probably time to cut bait here and move that [2024] crop along even though prices have actually stepped back now,” Hart said. “There’s not enough time left before harvest comes in.
“Now, when I’m looking at a new crop, what this tells me is to wait. The idea is that there’s no reason I have to be marking up sales on the crop that’s growing right now. Time is my friend in this case. This doesn’t bode well for us as we move to harvest, because the combination of trade uncertainty plus two very large crops leads to definitely significant downward price pressure as we go into harvest.”
Hart said advance sales of corn and soybeans are both below what the numbers should be for this time of year, with soybeans in particular lagging behind. At this point in the season, Hart said, soybean sales should be north of 200 million bushels. As of Wednesday, Hart said 50 million bushels had been sold.
Corn, Hart added, was sitting at around 180 million bushels in advance sales as of Wednesday — when sales are typically at 280 million bushels.
Three ‘Camps’ Emerging After Latest Tariff Moves
Hart said he sees three different “camps” of countries emerging in the wake of Trump’s Aug. 1 announcement and subsequent letters.
One camp, he said, is the ever-growing list of countries that have received a letter from the United States notifying them of new duties that will go into effect on Aug. 1. This list includes 20-plus countries, with notable names being Japan and South Korea.
The camp of countries without letters, he said, could be split into two camps: countries who have made strong progress in deals, and countries that are not a main focus for the administration.
The problem with the final two camps, Hart said, is the difficulty in truly identifying who goes where given the ever-changing situation.
“You can’t separate them, those that have made far enough progress that the president isn’t going to send a letter versus those countries where they haven’t made progress, but the administration really isn’t concentrating on them and so they didn’t bother to send them a letter,” Hart said.
Iowa Farmers Union President Expresses Concern Over Trade
In response to the recent news, non-profit farm organization Farmers for Free Trade partnered with the Tariffs Cost Us initiative to hold a press conference Wednesday with farmers and small business owners.
Among the speakers was Aaron Lehman, a fifth-generation farmer in Iowa and the Iowa Farmers Union president, and Robert Hemesath, an Iowa farmer and the board president of Farmers for Free Trade.
Lehman said the Trump administration was “moving the goalposts” and that tariff delays have led to “increased costs and lower market prices for what we grow.” Lehman said that, while there have been trade deals in the past with negative effects on farmers, the current trade policy has not helped make trade fair for producers. Lehman said there could be long-term effects to the delays on Iowa farmers.
“It means we put off buying machinery and making other farm improvements,” Lehman added. “Sometimes we even put off bringing the next generation onto the farm, which is extremely dangerous, because the average age of the Iowa farmer is over 57 years old.”
Export Markets At Risk?
Hemesath said the uncertain nature of the current trade market has made it more difficult for farmers to export goods, a key portion of their revenue. Hemesath mentioned corn, pork, and ethanol as areas that are heavy export markets for farmers — adding that when trade disputes pop up, agriculture is “one of the first [areas] that gets hit.”
While he said he understands the concerns with other countries potentially having unfair trade practices, Hemesath said the longer there is uncertainty in the market, the harder it will be for American farmers to get those markets back.
“We’re looking at negative margins on those crops, and when there is the uncertainty of not having those trade markets, or if those trade markets are going to be available, it puts a bigger cloud on the economy,” Hemesath said. “That has a ripple effect.”
Missouri Distiller Feeling Pain From Looming Tariffs
Nick Colombo, the co-owner of Switchgrass Spirits in St. Louis, said the looming duties against countries like France and South Korea have caused him to push the pause button on exports with two of his distributors. The whiskey is American-made and uses mostly American products, Colombo said, but the loss of consistency in the trade market has led to him buying less from his suppliers. Colombo said he feels bad for the people he buys corn from because of his cuts.
“Our grain all comes from the United States, from the Midwest,” Colombo said. “We’ve bought corn from Indiana, Kansas, and Missouri. We’ve bought rye from Minnesota, North Dakota, and Pennsylvania.”
Colombo said the tariff threats are having the opposite effect from what producers want.
“I have to raise prices, I make less stuff, I buy less stuff,” Colombo said.
