Yves here. Michael Hudson makes a short but devastating indictment of the destruction Trump policies are inflicting on the agriculture sector. The most visible example is soybeans, which had until Trump tariffs, had had China as their biggest buyer. But other types of farmers, as well as farm suppliers like John Deere, are also in a world of hurt.
In a bit of synchronicity, Nikkei has just published US soybean farmers face crisis as China keeps orders frozen, which add color to Hudson’s account. Key sections:
Trump and Chinese President Xi Jinping are speaking on Friday about a U.S. TikTok operation and other tariff issues. It is unclear whether agricultural purchases and the plight of American soybean farmers will come up. Either way, analysts say the soybean standoff is revealing China’s tactics and priorities while also highlighting U.S. vulnerabilities….
“If it was a hot war, China wants to know that it is possible to get through an extreme situation for food security,” she [Even Pay, director at Trivium China] said. “China also wants to know that it can’t be backed into a corner by a hostile U.S. administration.”
Pay added that China has also been pursuing a long-term plan to diversify sourcing, due to concerns that the country was overly reliant on American soybeans….
Johnny Xiang, founder of Agradar Consulting in Beijing, said that China’s purchasing of Brazilian soybeans this year has been quite “aggressive,” and that it now has a steady supply of soymeal from Argentina and Uruguay as well. “China’s purchases of U.S. soybeans depend entirely on whether the Trump administration removes the tariffs on Chinese goods,” he said.
Chinese buyers historically purchase American soybeans in September, as the Brazilian harvest comes to an end. Experts are mixed about whether China can completely forgo U.S. supplies — which are also subject to 34% Chinese tariffs — this year if a trade deal does not come to pass. Some say China’s current supply will not last until Brazil begins picking new crops in February, but Trivium’s Pay said China’s policy rhetoric could suggest otherwise.
“Someone is going to have to eat some pain,” she said….
The U.S. Department of Agriculture this week made its lowest soybean export forecast since 2013, at 1.65 billion bushels.
In North Dakota, where agriculture makes up over a quarter of the state’s economic output, 90% of soybean production is exported, according to the North Dakota Soybean Council — most of it, under normal circumstances, to the world’s top buyer, China. Unlike states further south and east, such as Illinois, which are better positioned to shift their supply to other markets such as Europe and Mexico, North Dakota’s soybeans are farmed near railroad infrastructure purpose-built for sending harvests to the West Coast and on to China.
Nikkei points out that US soybean farmers went through a similar crunch in Trump 1.0, when a China trade war led to a sharp cut in soybean buys. That Administration made $23 billion in payouts to farmers in 2018 and 2019 to offset the damage.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is The Destiny of Civilizatio
Trump has created a crisis for U.S. agriculture with his Cold War weaponization of foreign trade with China and Russia, for manufacturing as a result of his steel and aluminum tariffs, for consumer price inflation mainly from his tariffs, and for affordable housing with his tax cuts that have kept long-term interest rates high for mortgages, auto and equipment purchases, and deregulation of markets giving a free hand to monopoly pricing.
- Trump’s Impoverishment of U.S. Agriculture
Trump has created a perfect storm for U.S. agriculture, first in his Cold War policy that has closed off China as a soybean market against and Russia, second in his tariff policy blocking imports and thus raising prices for farm equipment and other inputs, and third in his inflationary budget deficits that are keeping interest rates high for housing and farm mortgage loans and equipment financing – while keeping farmland prices low.
The most notorious example is soybeans, America’s major farm export to China. Trump’s weaponization of U.S. foreign trade treats exports and imports as tools to deprive foreign countries dependent on access to U.S. markets for their exports, and on U.S.-controlled exports of essential commodities such as food and oil (and most recently, high technology for computer chips and equipment). After Mao’s revolution in 1945, the U.S. imposed sanctions on U.S. grain and other food exports to China, hoping to starve out the new Communist government. Canada broke this food blockade – but it has now become an arm of U.S. NATO foreign policy.
Trump’s weaponizing of foreign trade – keeping open a constant U.S. threat to cut off exports on which other countries have come to depend – has led China to totally stop its advance purchases from this year’s U.S. soybean crop. China understandably seeks to avoid being threatened by a food blockade again, and has imposed 34% tariffs on U.S. soybean imports. The result has been a shift in its imports to Brazil, with zero purchases in the United States so far in 2025. This is traumatic for U.S. farmers, because four decades of soybean exports to China have resulted in half of U.S. soybean production normally being exported to China; in North Dakota the proportion is 70%.[1]
China’s shift in its soybean purchases to Brazil is irreversible, as that country’s farmers have adjusted their planting decisions accordingly. As a member of BRICS, especially under President Lula’s leadership, Brazil promises to be much a more reliable supplier than the United States, whose foreign policy has designated China as an existential enemy. There is little chance of China responding to a U.S. promise to restore normal trade by shifting its imports away from Brazil, because that would be traumatic for Brazilian agriculture and would make China an unreliable a trade partner.
So the question is, what is to become of the enormous amount of U.S. farmland that has been devoted to soybean production? Unable to find foreign markets to replace China, farmers are reported to suffer a loss on their soybean production, which is piling up in excess of existing crop storage capacity. The result is a threat of farm foreclosures and bankruptcy, which would lower prices for farmland. And as interest rates remain high for long-term loans such as mortgages, this deters small farmers from acquiring troubled properties. The result is to accelerate the concentration of farmland in the hands of large absentee financial funds and the wealthy.
This shift is irreversible. Despite the Supreme Court ruling that Trump’s tariffs are unconstitutional and therefore illegal, it seems likely that Trump could simply have the bipartisan anti-China Congress and Senate impose these tariffs. In any case, Trump’s policy represents a sea change, a quantum leap into U.S. coercive trade aggression.
There is zero chance of U.S. China trade in soybeans or other basic Chinese needs from being revived. Neither it nor other countries threatened by U.S. trade aggression can take the risk of depending on the U.S. market.
America’s agricultural cost and income squeeze goes far beyond soybean sales. Production costs are also rising as a result of Trump’s tariffs, especially on farm machinery, fertilizer and credit tightness as the risk of farm debt arrears increase.
- Trump’s tariffs are raising U.S. industrial costs of production
Trump’s tariff anarchy also is causing losses and layoffs of two thousand employees for John Deere and Company, with a demand also falling for other manufacturers of farm equipment. The most serious problem is that its harvesting equipment, like automobiles and all other machinery, is made out of steel, along with aluminum. Trump has broken the basic logic for tariffs – to promote the competitiveness of high-profit capital-intensive industry (especially for established monopolies), largely by minimizing the cost of raw materials. Steel and aluminum are basic raw materials.
These tariffs have hit John Deere in two ways. For its domestic production, sales are low because of the depression of farm income cited above. Yields have soared this year for corn as well as soybean, leading their prices and farm income to decline. That limits the ability of farmers to buy new machinery.
Deere imports about 25 percent of the components of its products, whose cost of is increased as a result of Trump’s tariffs.[2] Deere’s manufacturing facilities in Germany have been especially hard hit. Trump surprised Deere by ruling that over and above his 15% import tariffs on imports from the EU, he is imposing a 50% tax on the steel and aluminum content of these imports.
That also hits foreign producers of farm equipment, leading to new complaints by EU about Trump’s constant “surprises” in adding to his demand for “givebacks” in exchange for not raising tariffs on imports from the EU even further.
- Trump’s Fight to Accelerate Foreign Reliance on Oil and Hence Global Warming
Opposing any alleviation to global warming, Trump has withdrawn from the Paris agreement and has cancelled subsidies for wind power, and also for public transportation. This is the effect of lobbying by the oil industry. Not only is U.S. foreign policy dominated by the demand to control oil as the key to weaponizing foreign trade sanctions, but also U.S. domestic economic policy. Soon after World War II ended, Los Angeles tore up its streetcars, forcing its inhabitants to join the automobile economy. Dwight Eisenhower initiated the interstate highway program to favor auto transportation – and with it the consumption of oil.
Also plaguing U.S. agriculture is a deepening water shortage for crops and destruction caused by flooding, drought and other extreme weather. One cause is the extreme weather resulting from global warming, which Trump denies as part of his policy to support U.S. oil and coal while actively fighting against wind and solar energy production. He has withdrawn U.S. support for the Paris Agreement with other nations to de-carbonize world production.
Insurance costs are rising to unaffordable levels for many areas most prone to storms and flooding, much as the annual cost of housing has soared in Miami and other Florida cities and the southern border states threatened by hurricanes.
A parallel disruption is the rising electric price as well as a water shortage caused by the rising demand to cool the computers needed for Trump’s support of automatic intelligence and quantum computing. The increasing demand for electricity far beyond the investment plans by power utilities to increase their production. Such planning takes many years – and utilities are happy to see the shortages push demand far above supply, enabling prices for electricity to be one of the major contributors to inflating the cost of production.
Trump and his cabinet have made fun of China for spending so much money on its high-speed train service. Western calculations of economic efficiency leave out the all-important balance-of-payments effects of this rail development: It avoids forcing Chinese to drive cars using imported oil. China has no domestic oil industry to dominate its economic planning or foreign policy. In fact, its foreign policy aims regarding the oil trade are the opposite of those in in the United States.
- Trump’s Sanctions to Weaponize U.S. Exports to Its Designated Enemies
Trump’s (and Congress’s threat) to sabotage exports of computer switches with secret “kill switches” to turn them off by U.S. fiat has led China to cancel its planned purchases from Nvidia. The company has warned that without the profits from exports to China, it will be unable to afford the R&D needed to keep competitive and maintain its monopoly on chip manufacturing.
These trade policies slashing U.S. export markets and imports are just one reason why the dollar is weakening. Other causes are declining tourism as a result of U.S. harassment, especially of foreign students from China, on which U.S. universities have depended as the highest-paying students.
These non-trade balance-of-payments trends explain why Trump’s high-tariff policy has not led the dollar’s exchange rate to strengthen despite its effect on discouraging imports. Normally that would increase the trade balance. But Trump’s war against all other countries (mainly his European allies, Japan and Korea) has led to a shift of their dependency on U.S. exports (such as soybean) and products against which they are retaliating in order to protect their own balance of payments, e.g., cutbacks in foreign tourism to the U.S., foreign students, dependency on U.S. arms exports – and most of all, financial capital flight seeing that the shrinking U.S. home market must cut into foreign profits and the dollar’s decline will reduce its valuation in foreign-currency terms.
Also, as BRICS and other countries conduct trade in their own currencies, this reduces their need to hold foreign-exchange reserves in dollars. They are shifting to each others’ currencies, and of course to gold, whose price has just soared over $3,500 an ounce.
- Trump’s Sharp Increase in Inflation, from Electricity and Housing to Industrial Products Made Out of Aluminum and Steel, or Subject to Crippling Tariffs on the Supply of Parts and Necessary Inputs
Trump’s decision to impose tariffs on basic inputs, headed by aluminum and steel, are increasing prices for every industrial product made out of these metals.
And of course, his tariffs generally are rising prices across the board as companies have waited a polite month or so before raising prices as their existing inventories of goods produced by China, India and other countries are exhausted.
Trump’s deportation of immigrants has increased the cost of construction, which relied largely on immigrant labor – as did agriculture in California and other states at harvest time. It is not clear who, if anyone, will replace this labor.
Instead of attracting foreign investment as Trump has demanded that Europe and other trade “partners” provide, he has made this market much less desirable. What he has done is provide an object lesson in what other countries need to avoid in creating regulations, tax rules and trade policy to minimize their costs of production and become more competitive.
- Monetary Policy Is Sharply Increasing Long-Term Interest Rates, Even if Short-Term Rates Decline
Long-term interest rates determine the cost of mortgages, and thus the affordability of housing. Trump’s inflationary policy also increased interest rates for long-term bonds. The effect is to concentrate borrowing at short-term maturities, concentrating the problems of rolling over debt in times of financial crisis. This impairs the resilience of the economy.
Many consumer goods imports are bought by the ultra-rich – the 10% of the population who are reported to account for 50% of consumer spending, For them, higher prices simply increase the prestige of such conspicuous-consumption status items (including expensive food delicacies).
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[1] Alan Rappeport and Tim Gruber, “China’s Snub of U.S. Soybeans Is Creating a Crisis for Farmers,” The New York Times, September 16, 2025.
[2] Kevin Draper, “John Deere Sputtering As Farmers Struggle,” The New York Times, September 15, 2025.
Couldn’t tell you anything about soybeans other than I enjoy a douse of soy sauce on Asian dishes…
Trump killed the almond biz in his first term by levying tariffs on China and they respectfully retaliated on a good many things including almonds.
You went from being so prudent in getting in on the gravy train that was $4.50 a pound-the king of the orchards!
So, it wasn’t as if it was Trump alone that killed the biz, greed loomed large, and there are now more almond trees in Cali than American citizens.
There hasn’t been a run on nooses in Godzone, but they’re in between a rock and a hard place-almond growers.
The price per pound has fluctuated between $1.50 and $2, they’re all losing money.
And this year is a bumper crop, over 3 billion pounds worth!
MH: “Trump has created a crisis for U.S. agriculture with his Cold War weaponization of foreign trade with China and Russia…”
LD: Why?
DB: “…this is the intentional tanking of America’s economy in a certain industry so few power brokers can profit from the suffering and misery of the have-nots.”
LD: Who?
Trump’s Farmland Tariff Squeeze Is Making JD Vance A VERY Wealthy Man
By Dean Blundell
How Trump’s tariff shock turns family farms into a fee stream for Wall Street—how and why political insiders are positioned to profit BIGLY from America’s farming collapse…
LD: Oh. Why am I not surprised?
Great link. Behind the curtain machinations fueling the agricultural policies. Not surprising but certainly sinister. Thiel is praying that the antichrist doesn’t show up to put the kibosh on the plan.
Holy moley. I thought farm failures were just byproducts of their stupidity, now it turns out it’s another one of their grifts. Good grief. “Hey I know, instead of the jillion other ways to make a buck, let’s ruin America for fun and profit, I have this great plan!”
Small farm failures have been caused by deliberate Congressional policy over a period of decades. While this Vance investment is disgusting, I wouldn’t link it directly to Trump policies alone. My family’s farm went belly up after 100 years during the Biden administration and I’m pretty sure Russian sanctions during that time didn’t help them one bit, and may have been the final nail in the coffin. Luckily they did keep the land so Vance won’t be scooping it up any time soon.
The state of Iowa comes to mind. My grandparents lived there, my parents met there, and I spent a lot of time there while growing up, so I got to watch the changes in Iowa from the 1970s to present. The death of small towns and the rise of industrial agriculture just killed the vitality of that state– it was a horrible thing to see, and certainly more so to experience.
Same here, Wapello, Iowa. German Ag was very involved at the time, hence all the old family farms went co-op so they could hit the magic number of 1000 acres to be viable. This also meant having to CapEx up for the huge tractors and equipment. Aunt worked for U.S. Ag agency all her life and worker her way up near the top in the state.
The Old Thresher Conventions were something to see though. Huge old hay balers with heaps of old boys jumping on it like ants as it required constant fiddling. My first vehicle was a John Deer A and loved my grandfathers old D multi fuel. Late in life he did get a Diesel 50.
Then again I have seen the same dynamic all across America over the decades. Take a picture of it as it will not last long. Heck …. Brisbane since 95, phew …. like groundhog day ….
Good post. My favorite tractor was a Farmall. I’m a big tractor
pull fan!
Not from Wapello myself, Aunt noted lives there, few others live around or in Burlington. Before retiring she was County Executive Director at USDA Farm Service Agency. That said my mothers side of the family in Iowa goes a long way back and its Sir name is German. All part of the original ethnic stock that immigrated long ago. As such the History of that state is deep in my family. I know it by being passed down to me by those the were born in the early 1900s. Grandmother thought she was going to die just because of the unnatural speed of the first Model T she road in.
Anywho … its all just so multivariate … grandfather back in the day got a big Gov check for many years not to plant wheat – waves at USSR agenda. Not that he was going too or anything else at that time. Scaled everything back in the 70s and worked for a plywood Mfg but wanted to keep the land.
Yes, as a kid I did enjoy spending time with these people as it was a window into another time before me. Learned a lot, good and bad. What I take away from it all is how ideological economics/foreign policy effected everyone. Transformed the world these people were born into, shaped reality to suit some peoples agendas, and how it reflected on how well the agency behind it came out – both in power and wealth.
PS the Pulls before they went drag car level and just a community event at the county fair were heaps of fun. Loading on the JD D on my grandfathers 38 2.5T Dodge flat bed for transport, then seeing him pull in his stock OD green utility uniform worn save Sunday church …. sigh …
Same here. Cedar Falls. First university job. Great town, even the neighboring John Deere Company Town, Waterloo. I was Teaching English to the Future Leaders of Malaysia under, no doubt, a black budget operation of the CIA.
1983-1984, NED replaces black budget with upfont brain drain raids to more prestigious schools. Next thing: no job, and, together with the tender ministrations of Paul Volcker, no house.
I escaped. Iowa didn’t.
Another great piece from Michael Hudson. The incompetence, ignorance and dysfunction (as well as corruption and lawlessness) of the DT2 regime is almost unbelievable. Of course this sort of thing has been a long time coming, but as many here have pointed out: the current regime is greatly accelerating the decline of the US domestically and internationally.
I hear people complaining that prices continue to rise, and the “stagflation” appears to be getting worse. The layoffs in ag and companies like John Deere is a great example. I’m afraid we have only seen the beginnings of the trend.
If the US can no longer use control of energy and food as a weapon, what can it do to coerce other nations? Threaten more war? The thought of incompetents in control of the “nuclear football” is not very comforting.
“…Trump and his cabinet have made fun of China for spending so much money on its high-speed train service…” Yeah, why invest in infrastructure, when you can asset-strip and “kleptocracize” the economy?
The incompetents can’t see what they are doing will not bring back jobs to the US. But was that really their intention or just another con-job?
Trump and his cabinet have made fun of China [but the joke is on Americans] for spending money on its high-speed train..
The EU and Japan would gladly purchase more American soybeans if Trump asked them to.
This seems like a good place to mention the 2018 Rick Wilson book.
Everything Trump Touches Dies: A Republican Strategist Gets Real About the Worst President Ever. Hardcover – August 7, 2018
Probably the best titled book ever. And well ahead of it’s time.
Modern Midas!
Another memorable title: Commander in Cheat: How Golf Explains Trump. Know what? It kinda does.
For some reason, my youtube feed presented yesterday quite a number of pieces on the diverse headwinds on a range of agricultural exports and imports (Brazil – oh – my – coffee). Here is an article on why it is good to have good relationships with your agricultural trading neighbors:
https://www.reuters.com/markets/commodities/us-agricultural-exportsimports-threatened-by-trump-trade-actions-2025-03-04/
Seems like the Trump Tariff economic model (on a napkin, I assume) conveniently put zero in the retaliatory tariff effect. Strangely, the “model” works as a vassal illuminator, e.g., the EU and Japan, and maybe Korea.
Interestingly, Trump’s climate policy is highly consistent: Since benefits are shared, the costs are for vassals – i.e., the rest of the world – see the napkin tariff model. This neglects the economic advantages of leadership in new energy technologies (obviously, morality is for vassals).
Yes it’s all insane but who will tell the emperor that he is naked (eeuw).
I notice at my favorite non discount grocery that pork products–which used to frequently be on sale–now never are. I wonder whether this has to do with the Chinese now owning Smithfield or perhaps it’s that with beef prices soaring they figure they can recover their profits from lower sales by charging more for the less expensive pork.
Not that some of us have to worry so much about food prices but those farmers who voted for Don must be annoyed.
Hudson’s claim that Brazil benefits from China shifting its soybean import from the US to Brazil is not quite correct.
This paper here: Transparency in Global Agribusiness: Transforming Brazil’s Soybean Supply Chain Based on Companies’ Accountability demonstrated very clearly that apart from the farming sector, nearly the entire supply chain of soybean production in Brazil has been overwhelmingly dominated by foreign multinational agricultural conglomerates:
What Trump has effectively achieved is screwing over the Trump-voting farmers and allowing for their consolidation by the big Ag corporations who have lobbied for their own interests under the Trump administration.
Hudson’s claim that Brazil benefits from China shifting its soybean import from the US to Brazil is not quite correct.
Brazil likely benefits as much as Ukraine does from these multinationals recent investments in its farmland, but at least without war, so far.
I’m old enough to remember “90 deals in 90 days” even. Wasn’t that a few months ago? The fantasy land presidency.
I’m old enough to remember Hope&Change– another fantasy-land presidency… not quite old enough to recall the Reagan slogans of 1980, but I’m sure they offered-up something similar.
Duopoly supporters are either in on the grift, or completely fvcking delusional.
The Memory Hole Cycle has become shorter and shorter. I still remember promises to end the Ukraine war in 24 hours, grocery prices would plummet etc. Rainbows, unicorns and cotton candy for everyone.
And I am just old enough to vaguely remember Ronny and Nancy Reagan “Just Say No” to drugs slogan.
The slogan parade is the politicians telling us that we’ll fall for slick presentations, and we’ll like it.
Zero accountability, not accepted by them because they don’t have to.
Could someone explain to me why China dont grow soyabeans them self. The climate is not as bad as Russia.
Maybe because most of their farmland is for growing rice?
I don’t know much about President Trump’s intents especially on American agriculture, but I do know that most civilizational collapses as well as many civil wars really are caused by the price and availability of food. People really don’t like starving and expect the government to do anything to prevent it. If the perception is that the elites and/or the government don’t care… well, it’s almost always a bloody time for all including the elites.
But one would have to do some reading on history to know this wouldn’t he? Not it takes much thought to realize just how politically devastating hunger can be.
Here is a you tube video titled : ” Why farmers voted for Trump”. She had run for Agriculture Commissioner of North Carolina as a Democrat and she lost. But she got to talk to lots of fellow farmers along the way. ( She says that she is a farmer herself and I have no way to know that she isn’t).
Her first 4 words in the video are: ” Hi. I’m a farmer.”
She makes her case as to why the Trump-voting farmers knew all about Trump’s return to tarriffs and trade war. They figured the TrumpenVance Admin would bail them out again just like the prior Trump Admin did.
So they figured they had priced tarriffs in. They ( as millionaire or multimillionaire farmers) were voting for promised tax breaks and other things of material interest to themselves.
She describes how they were warned, by her and by others, that this time around the prospective TrumpAdmin had other plans for them which would turn out badly for them. They figured they were running a calculated risk with the promise of a lucrative reward.
I can just keep reprising and reprising, or I can offer a link to the video itself. So, here it is.
https://www.youtube.com/watch?v=badGHJLDpP8
( We should remember that not every last farmer voted for Trump. For example, 64% of Arkansas farmers are reported to have voted for Trump. But that means that 36% of Arkansas farmers did not vote for Trump. Who were they and what were their reasons? And is there anything we can do to find out who they are and help save them from the Bonfire of the Trumpenfarmers?)
…is there anything we can do to find out who they are and help save them from the Bonfire of the Trumpenfarmers?
Create a new (viable) political party with a platform that is something like what the democrats used to have several generations ago, long before they abandoned Main Street for Wall Street?
Living in rural America, I can tell you that they’re not gonna stick their necks out for something that smells like BS or could create conflict with neighbors or within their communities, especially the smaller ones.
Yeah, messaging ain’t gonna cut it.