In the heart of America's agricultural belt, the threat of a new trade war is no longer a distant concern. This time, producers face a far more precarious scenario than during President Trump's first term between 2018 and 2020. The recent spike in tariffs on nearly all major U.S. trading partners has triggered alarms across soybean and corn fields, where farmers are already battling low prices, rising input costs, and mounting debt.

April Hemmes, a fourth-generation farmer in northern Iowa, knows firsthand the uncertainty of farming. Her family has worked the same land since 1901. "With so much uncertainty, how can we plan? We need a path forward. It's like changing a tire while we're still driving," she says. During Trump's first trade war, Hemmes managed to reduce her debt thanks to higher grain prices and federal aid. Today, the conditions are radically different.

Over the past four years, grain prices have declined. Soybeans, a major U.S. export and economic pillar in the Midwest, have lost 34% of their value in the international market. Meanwhile, net farm income has dropped for three consecutive years. The post-pandemic rebound is fading, and profit margins are tightening.

Adding to the pressure is the steady increase in production costs. Essential fertilizers like ammonium, phosphorus, and potassium have risen between 10% and 15% over the last five years, according to Farmdoc, the University of Illinois' agricultural research initiative. Diesel, vital for transportation and machinery, has seen one of the steepest price hikes.

"The big difference between the first trade war and this one is that our costs are much higher now," Hemmes explains. "Farmers spend a lot of money even before planting. We have to borrow heavily before putting a single seed in the ground."

Access to credit has also become more restrictive. Average interest rates for farm loans have increased by more than 40% since 2020. By the end of 2024, farmers had less cash on hand, and banks were forecasting insufficient income for 2025. The non-real-estate farm loan repayment rate has declined for six straight quarters, signaling that many producers are struggling to stay afloat.

Patrick Westhoff, director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, believes that political uncertainty has reached unprecedented levels. "There are always uncertainties due to weather and markets, but now there's an additional one that's political, and it could go very well or very badly, and we just won't know until it happens."

Chad Hart, economist at Iowa State University, notes that farmers are caught between rising costs and falling prices. "They're borrowing more, but it's becoming harder to pay back." The Federal Reserve has raised interest rates to combat inflation, making capital more expensive just when farmers need it most. Trump has pressured the Fed to lower rates, even threatening to fire Chairman Jerome Powell, but the central bank has maintained its independence.

In this context, the U.S. and China reached a temporary tariff truce, reducing duties on Chinese goods from 145% to 55%, and U.S. exports to 10%. However, tariffs on other key trade partners like Mexico, Canada, and the European Union have only been paused until July 9. The truce is widely seen as fragile and temporary.

One of the most severe consequences of the first trade war, according to Hemmes, was the loss of the Chinese soybean market for U.S. producers. Brazil and other South American countries stepped in as main suppliers. While U.S. exports have not stopped, volume and market share have suffered. "We can't underestimate how much China buys," she affirms. She also stresses that trade with Canada and Mexico is vital: "We get fertilizers from Canada, ag chemicals from China, and parts and machinery from Mexico."

A Purdue University-CME Group survey of farmers found that 44% anticipate a negative income impact from tariffs in 2025, and 53% fear supply disruptions. Still, 70% believe that tariffs could strengthen U.S. agriculture in the long run. This sentiment may reflect what the Financial Times calls "TACO" (Trump Always Chickens Out), referencing a pattern where Trump announces radical tariffs only to later soften them.

Westhoff warns that if high tariffs resume and countries retaliate, a severe market disruption could follow. "If we get to July 9 and those tariffs are implemented, the market impact will be swift and deep."

In summary, U.S. farmers face a daunting landscape: low prices, expensive inputs, tight credit, and an unpredictable trade policy. This second trade war could prove more devastating than the first. And as Hemmes puts it, "changing a tire while driving" may no longer be enough to stay on th