How Global Policy Impacts Farmers
Global trade wars may seem like something happening far away in diplomatic chambers and boardrooms, but their impact is felt sharply in rural America. If you’ve noticed your equipment costs creeping up or commodity markets getting more volatile, chances are you’re already feeling the effects of tariffs and trade retaliation. These policy decisions shape the everyday economics of owning and operating land.
In a recent episode of the National Land Realty Podcast, Dr. Scott Baier, economics professor and Associate Dean of Research at Clemson University, joined host Mac Christian to explain just how deeply international trade policy affects rural communities.
Impact of Tariffs on Consumers
In recent years, tariffs have been used aggressively against other nations as a kind of negotiating weapon. The intention, especially under the Trump administration, is to push other countries to the bargaining table by making it more expensive for them to export goods to the United States.
That approach, however, can complicate things for American ag producers and consumers. Baier explained, stating, “With some of the tariffs that he’s tried to put in place, it could really harm consumers as well. It becomes very difficult for firms to plan going forward. If you can’t plan, it makes it difficult to hire, difficult to add a new factory. That uncertainty becomes a real drag on the economy.” For landowners and producers, that means costs become harder to predict, and investments become riskier.
Alongside this uncertainty comes the possibility of retaliatory tariffs imposed by other nations, which have historically hurt ag producers and rural communities. During the first Trump administration, China stopped buying American produce and imposed retaliatory tariffs on exports like soybeans, leading to falling commodity prices and leaving farmers with unsold crops. Ultimately, the federal government stepped in to offset some expenses for these ag producers impacted by the trade war, but many still experienced significant financial hardship.
Supply Chain Tensions on America’s Farmers
Present-day supply chain disruptions can be traced back to the COVID-19 pandemic, which exposed significant shortcomings in global supply chain networks. While the pressures applied by the pandemic are no longer front and center, the global supply chain, which provides ag producers with necessary inputs like fuel, fertilizer, and more, is still struggling to provide at pre-COVID levels.
Trade disputes exacerbate these supply chain shortcomings, as Baier explained, stating, “We’re blocking each other and doing damage to both the U.S. and China in the process.” For agricultural operators, this translates into higher prices and more delays for equipment, parts, and critical farm inputs. In short, global trade friction shows up in the very tools farmers rely on every day.
What Can Farmers Do?
Farmers and landowners find themselves uniquely exposed in this global chess match. They depend on foreign markets to buy their crops, foreign inputs to grow them, and globally linked equipment to harvest them. At the same time, they rarely have a seat at the table when these policies are crafted.
Baier sums it up bluntly: “Trade deficits, retaliation, supply chain bottlenecks—these things aren’t abstract economic problems. They shape everyday life for people in agriculture. The impacts are real and immediate.”
For farmers, staying informed about trade and tariff developments is crucial. Understanding the forces behind price changes and equipment delays can help plan better and invest smarter. Preparing for volatility, reevaluating financing decisions, and diversifying income through leasing, conservation programs, or alternative energy partnerships can help cushion the unpredictability.
If you’ve got questions about how policy may impact your land values or agricultural operations, get in touch with your local Land Professional today!