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As President Donald Trump imposes sweeping tariff increases and other countries retaliate in kind, US agricultural exports are likely to decline. Yet Trump has repeatedly insisted that American farmers can make up for the losses by selling more of their produce at home.
In a social media post on 3 March, Trump wrote:
"Get ready to make a lot of agricultural product to sell INSIDE the United States."
But that vision collides with a difficult reality: there is no domestic substitute for the Chinese market, particularly when it comes to soybeans, America's second-largest agricultural crop.
According to an analysis of US Department of Agriculture (USDA) data by Investigate Midwest, more than 40% of US soybean production was exported in 2024.
More than two-thirds of those exports went to China. No other country came close to that volume: Mexico accounted for 11%, and the European Union 9%.
Trump, who once called "tariffs" his "favourite word," has imposed higher duties on most of America's trading partners, with China bearing the brunt of the increases.
On Wednesday, Trump announced a 90-day pause on the tariff hikes for most countries — with the notable exception of China, on which he raised duties to 125% this week.
China has already retaliated with 84% tariffs on US goods.
Josh Gackle, a third-generation farmer from south-central North Dakota, said:
"You can't replace the China market overnight. It's simply too big a piece of the picture. As farmers, we need to make sure we keep working with China and buyers there."
In addition to the retaliatory tariffs, the Chinese government has suspended soybean imports from three US companies: CHS Inc, Louis Dreyfus Company and EGT.
Trump views tariffs as a tool to correct trade imbalances and encourage domestic manufacturing, and has justified the increases as a response to what he calls unfair Chinese subsidies — and even to China's alleged harbouring of criminal groups involved in producing synthetic opioids.
But the economic fallout is landing squarely on American farms.
States such as Illinois, Iowa and Minnesota — the country's biggest soybean exporters — rely on international buyers to keep commodity prices stable and sustain their local economies.
A recent study by North Dakota State University underscores how serious the situation could become: if China imposes a 20% retaliatory tariff on US soybeans, the state's soybean exports could fall by as much as 60%, costing local farmers roughly $639.9 million.
Soybean exports support about 231,400 jobs nationwide, while soybean meal exports contribute another 41,400 jobs, according to data from the USDA's Economic Research Service. Those jobs span agriculture, manufacturing, services, trade and transport.
The American Soybean Association has called for a rapid shift in strategy.
Caleb Ragland, the association's president and a soybean and grain farmer in Kentucky, said:
"We're hopeful that opportunity can come from these challenges, and that the administration moves quickly with impacted countries to open new markets for US soybeans and other products, allowing these high tariffs to be removed. That includes negotiating the second phase of the trade agreement with China."
Discussions are underway within the Trump administration and among some lawmakers over a possible bailout package for American farmers, amid warnings from agricultural groups that escalating tariff policy could trigger serious economic fallout.
According to The Wall Street Journal, those talks remain in early stages, and the scope of any potential support has yet to be determined.
US Senator John Hoeven (Republican, North Dakota) said:
"We're talking about it, we're looking at it," noting that he had discussed the possibility of a support package with Agriculture Secretary Brooke Rollins at a meeting last week.
But agricultural groups have warned that retaliatory tariffs on US exports could push prices even lower, particularly for soybeans.
According to the American Farm Bureau Federation, more than 20% of US farm income is tied to exports.
Zippy Duvall, the federation's president, said:
"We urge the administration to work quickly to resolve trade disputes to avoid tariffs that put farmers and ranchers in the crosshairs of retaliation, and we hope this will be followed by strategies that expand marketing opportunities for the men and women who grow the food every American family depends on."
Soybean farmers cannot simply redirect their crop to the domestic market, nor can they easily switch to growing another crop.
Joe Janzen, assistant professor at the College of Agricultural, Consumer and Environmental Sciences at the University of Illinois, said:
"It makes more economic sense to grow soybeans in the US Midwest than in many other parts of the world. The cost of switching to other crops is substantial."
China, which accounts for 60% of global soybean trade, has become a key customer for American farmers thanks to its growing middle class and shifting dietary patterns toward more meat and dairy consumption. Soybean meal is a core ingredient in the feed that underpins China's massive pork and poultry industries.
Ishan Bhanu, chief commodities analyst at Kpler, said:
"That kind of demand can't be replaced domestically. It's not just that they're buying huge volumes — it's that they've built an entire protein production system around soybeans."
He pointed to the irony that Americans typically associate soybeans with products like tofu and soy milk, yet don't consume large quantities of them directly. In fact, most US soybeans are processed into two main products: soybean oil and soybean meal.
Soybean oil is used in cooking oils, industrial lubricants and renewable biodiesel. But the domestic market has its limits.
Bhanu said:
"The US already processes about 55% of its soybean crop every year. And while demand for the oil has grown because of biofuels, the domestic market has its ceiling."
He added that building new processing facilities requires years of investment, and even then would raise a new problem: what to do with the leftover soybean meal?
"You can't produce more oil without producing more meal, and if there's no market for the meal, you end up stuck."
The United States began exporting more soybean oil in 2024, a shift from previous years when it was mostly consumed domestically. But Bhanu noted that this shift was driven by necessity rather than deliberate strategy.
He said:
"Soybeans aren't a niche crop — they're a core part of the American agricultural economy, and they're grown not because Americans are obsessed with them, but because there's a reliable, large customer in China."
As American farmers brace for another season of uncertainty, South American countries have begun capitalising on the situation.
During Trump's first trade war, American soybean farmers saw a sharp shift as Brazilian soybeans captured a larger share of the Chinese market.
When Trump took office in 2016, Brazil accounted for 46% of China's soybean imports. By 2024, that share had risen to 71%. Meanwhile, the US share fell by more than a third.
China shifted to Brazil as its preferred soybean supplier, drawn by cheaper prices and distance from political tensions. Brazil's advantage proved structural rather than temporary.
Joana Colussi, an agricultural economist with the farmdoc team at the University of Illinois, said:
"We're in the middle of a record harvest season in South America."
South America's soybean-producing nations — led by Brazil, followed by Argentina, Paraguay and Uruguay — account for about 55% of global soybean supply.
Current estimates put soybean production from the region's four leading producers at 8.41 billion bushels in the 2024-2025 season, up 9% from the previous year, according to a farmdoc report.
Brazil is leading that surge, with production expected to reach a record 6.15 billion bushels, up 13% from last year, according to a report from Brazil's national supply company, Conab.
The Brazilian Vegetable Oil Industries Association expects soybean exports to reach 3.9 billion bushels this year, up from 3.6 billion in 2024, marking the second-highest volume on record.
Colussi explained that the strong harvest resulted from two key factors:
She added:
"A large share of the growth in global soybean demand in recent years has been met by Brazilian soybeans."
She said this growth did not happen overnight — Brazil has been expanding its planted area for years, and still has room to grow, particularly in land currently used for cattle ranching.
Brazil also enjoys the advantage of producing two crops a year, thanks to favourable climate conditions and strong global demand.
This growth has also been aided by technology adoption and infrastructure development, with significant private investment over the past decade improving the country's ability to transport agricultural goods.
Colussi believes the new trade war puts American farmers in a much tougher position than in 2018, given higher production costs and razor-thin profit margins.
She said:
"US soybean farmers will certainly need more government support than they received in 2018, because we're facing a completely different scenario, especially when it comes to production costs."
Source: Investigate Midwest