Farmers and leaders in the U.S. agricultural industry were granted a reprieve last week when President Donald Trump issued a 30-day delay in implementing previously announced 25% tariffs on goods originating from Canada and Mexico.

As part of the deal, Mexican and Canadian leaders agreed to pause retaliatory tariffs, which would have taxed U.S. goods coming into those countries and added more border security measures to stem the flow of weapons, migrants and fentanyl.

However, Trump’s 10% tariff on all Chinese products was allowed to go into effect Feb. 4, resulting in retaliatory tariffs from Beijing that target U.S. agricultural machinery, among other goods, which are already facing a down market.

A report from the BBC says China tariffs on U.S. goods include a 15% border tax on imports of U.S. coal and liquefied natural gas products and a 10% tariff on American crude oil, agricultural machinery, and large-engine cars, although commodities were excluded from the tariffs.

The Business Record reached out to leaders in Iowa’s ag sector to ask for their analysis of the situation and potential impacts should the Mexican and Canadian tariffs go into effect.

Here are their responses.

Editor’s note: These responses were submitted before Trump announced this weekend 25% tariffs on all foreign steel and aluminum materials coming into the U.S. market.

Christopher Pudenz, economics and research manager, Iowa Farm Bureau
Agriculture drives Iowa’s economy, contributing production valued at $44.2 billion in 2023, while leading nationally in corn, soybean, and pork exports and ranking fourth in beef exports. However, trade disputes often target these products with retaliatory tariffs, creating uncertainty for farmers.

On Feb. 4, 10% tariff increases on Chinese goods went into effect. China retaliated almost immediately, including a 10% Chinese tariff on U.S. agricultural machinery, which is of relevance due to Iowa’s concentration of machinery manufacturers.

Notably missing on China’s new tariffs list were Iowa’s major agricultural commodities. While the U.S. exported $708 million worth of agriculture, construction, and mining machinery to China in 2023, the U.S. exported more than $18.3 billion worth of oilseeds and grains to China (U.S. Census Bureau). During the 2018 trade war, China’s retaliatory tariffs on U.S. soybeans and other agricultural goods (e.g., pork) caused an estimated $1-2 billion in damage to Iowa’s economy.

If 25% tariffs with Mexico and Canada had taken effect, U.S. pork and beef faced potential retaliatory tariffs, raising red meat export prices and reducing Mexican and Canadian purchases— hurting Iowa farmers and communities. USDA Secretary nominee Brooke Rollins, however, has pledged compensatory [Market Facilitation Program] payments in the event of a trade war.”

Stu Swanson, Wright County farmer and president, Iowa Corn Growers Association

Iowa farmers have faced challenges in recent years due to low commodity prices and rising input costs. Though corn has not been included in the first round of potential tariffs, it is a concern considering that Mexico is the leading importer of U.S. corn and Canada is the leading importer of U.S. ethanol.

As an Iowa farmer, I do have concerns that the implementation of tariffs could cause disruptions in key market channels for U.S. corn by opening the door for other countries to gain market share that is currently being held by the U.S. But, as we have seen in the past with the Phase One deal with China, tariff threats can be used to spark new negotiations and expand markets if used wisely.

I remain optimistic that the Trump administration is working to negotiate with the best interest of American farmers in mind. There are still a lot of unknowns, but at the end of the day, farmers want to continue increasing corn demand and growing markets so we can continue to feed and fuel the growing world.