Trump’s Liberation Day tariffs spark fears of economic turmoil for U.S. farmers

Time will tell how history remembers April 2, 2025. According to President Donald Trump, people will look back on the day he’s dubbed “Liberation Day” and remember it as the moment American industry was “reborn” and its destiny “reclaimed.” Despite warnings from economists of higher inflation and damaged international relations, Trump believes tariffs will in time make the nation “good and wealthy.”

Beginning at midnight April 3, his theory will be put to the test. Per his executive order, the U.S. will impose a minimum 10% tariff on all imported goods. On April 9, additional tariffs will be imposed on nations that levy higher tariffs on U.S. products, as calculated by Trump officials.

Currently, that amount will be roughly half the current duties levied on the U.S. For example, Trump officials say Japan imposes 46% tariffs on U.S. imports. In response, the United States will levy a 24% tariff on Japanese goods.

Trump’s executive order includes a clause authorizing higher tariffs on countries if they respond with additional tariffs of their own.

A 25% tariff on imported automobiles will go into effect at midnight April 3 as well. So far, it remains unclear how this will impact farm equipment.

Regarding tariffs on imports from Canada and Mexico, goods that are deemed compliant with the U.S.-Mexico-Canada Agreement will not be subject to tariffs. Those that aren’t will have 25% duties levied on them. Trump’s executive order includes a provision limiting tariffs on potash, a key fertilizer component, to 10%.

Trump says the tariffs will spur job growth and new factories. According to him, they will also “supercharge” the domestic industrial base, help break down trade barriers, and ultimately, yield stronger competition and lower prices.

“This will be, indeed, the golden ages of Americans coming back,” Trump says. “We’re going to come back very strongly.”

House ag committee Ranking Member Angie Craig, D-Minn., called Trump’s announcement a “world trade war.” According to her, tariffs levied by Trump in 2018 cost farmers $30 billion in lost exports. She said the latest tariffs are much broader than those imposed during the first Trump administration and believes the losses caused by them will force farms to close.

“Increasing input costs, shutting farmers out of export markets and causing middle-class families to pay more at the grocery store is not a winning strategy,” Craig said in a public statement issued minutes after Trump’s announcement. “Starting trade wars puts family farmers in the crosshairs for retaliation.”

The criticism of Trump’s tariffs is not limited to left-leaning politicians. While the president has repeatedly claimed his economic policies benefit agriculture, some question that math. According to George Frisvold, chair of agribusiness economics and policy at the University of Arizona, U.S. farmers earned 10% to 13% less under the first Trump administration than they did under the Obama administration — even while federal handouts doubled.

The first trade war with China cost farmers $27 billion in exports. When Trump left office in 2020, farm income increased by 27% with President Joe Biden at the helm.

“There were payments to farmers, but they didn’t compensate for those [export] losses,” Frisvold said. “I’ve never talked to a farmer who said, ‘I’d rather have my income come from government payments than the market.’”

Anticipating tariffs, John Pandol, director of special projects at Pandol Bros, a California grape and Georgia blueberry grower and exporter, said they pre-bought fertilizers and chemicals three to four months earlier than normal. They’re bracing for the worst.

“We have a seven-figure amount of our credit line on hold,” Pandol said. “That working capital is not working. Will millions of dollars per day be withheld from our paycheck?”

While the tariffs’ immediate impact will likely hurt farmers, the long-term outlook is also grim.

“If supply chains are disrupted, those relationships can be very difficult to get back, if it’s possible to get them back,” said Sheldon Robert Jones, deputy director of the Arizona Department of Agriculture, noting that China can go to Brazil for produce and to Australia for cattle.

Even under the best-case scenario, Skip Hulett, chief legal officer at NatureSweet, a San Antonio-based tomato grower, said moving supply chains to home soil is a behemoth task.

“We’re going to have to change a lot of policies to move this to the U.S. Even if we changed the policies today, it would take decades and billions and billions of capital investment,” he said.

Beyond supply chain impact, Frisvold warned of widespread economic fallout.

“These are, without a doubt, tax increases that have pervasive effects. The federal reserve is delaying interest rate reductions because of all this uncertainty about the inflationary impact of tariffs,” he said.

In other words, expect higher mortgage and interest rates, and increased prices across the board for the foreseeable future.

Despite these and other warnings, Trump remains adamant that tariffs are the answer to many of the nation’s ills. He went as far as to claim that when the U.S. had higher tariffs in the 1880s, the nation was collecting so much money, it “didn’t know what to do with it.”

He added, “Today, we are standing up for the American worker, and we are finally putting America first.”

While it may may take years to fully quantify the long-term impact of Trump’s new policy, one point seems undeniable. The world won’t soon forget “Liberation Day.” The question is what will people remember it for?

Tags: Canada, farmers, imports, U.S., Mexico, duties, tariffs, China, exports