Trade disputes, funding cuts, worker shortages, and delays in tax reform and the farm bill are impacting U.S. agriculture. Each of these policies and legislative issues will have short- and long-term implications for agricultural operations and food producers.

Below, Pinion advisors provide an overview of current policy challenges for agriculture, as well as potential timelines for tax and farm bill changes.

Ag’s Global Dependencies

U.S. agriculture is dependent on global markets. In 2024, U.S. agricultural exports totaled $176 billion and produced about 20% of U.S. farm revenue. American farmers also rely heavily on inputs from other countries.

Ongoing trade disruptions threaten to reduce the price of U.S. commodities, increase input costs, and allow U.S. competitors like Brazil to increase market share.

Summary of Ag Trade Impacts: Where It Stands Today & What Could Change

Within hours of taking office, President Donald Trump started proposing new tariffs and the rapid pace of his tariff imposition shows no signs of slowing. Trade uncertainty continues to cloud agricultural exports, ag inputs, and markets.

  • President Trump has levied 25% tariffs on imported steel, aluminum, autos, and auto parts, along with 10% across-the-board tariffs on all imports except those from Canada and Mexico. He also imposed 145% tariffs on all goods imported from China except electronics.

President Trump announced sweeping reciprocal tariffs on imports from more than 180 countries on April 2.

  • These tariffs included a 10% baseline tariff for all countries, with higher rates on approximately 60 countries the Trump administration deems as having a high trade deficit with the U.S. These higher rates range from 11% to 50%. However, these tariffs were promptly paused for 90 days for all countries except China.

In response to the various tariffs, China, the European Union, and Canada each enacted retaliatory tariffs on a range of U.S. agricultural goods.

  • China raised total tariffs on U.S. goods to 125% and already canceled 12,000 metric tons of U.S. pork shipments.
  • The EU has outlined potential consequences for U.S. farmers if talks to prevent retaliatory U.S. tariffs break down. Among the list of products included in potential tariff countermeasures are fruits, nuts and vegetables, cereal grains, oils, shellfish, bourbon, and food products.

Last week witnessed some positive developments. The U.S. and United Kingdom announced the framework for a trade deal last week- the first agreement since Trump launched steep global tariffs.

  • While final details are still being worked out, concessions included eliminating United Kingdom’s tariffs on ethanol and increasing access for American beef. Any American beef exports will still have to meet U.K. food standards.

And now, the United States and China agreed to slash tariffs on each other’s imports for 90-days, allowing time for further negotiations.

  • The U.S. will temporarily lower its tariffs on Chinese imports from 145% to 30%, while the Chinese side will drop measures from 125% to 10%.

Despite the recent progress on trade, significant tariffs remain in place and the 90-day U.S.-Chinese pause runs until Aug. 10, about a month after a similar suspension of some U.S. tariffs on the EU runs out.

“It is imperative we consider the long-term effects of these trade policies, which could lead to decreased market access and potentially permanent loss of market share to global competitors.

This ongoing uncertainty not only jeopardizes our farmers’ livelihoods but also the stability of food prices and supply chains both domestically and globally,” said Brian Kuehl, Pinion’s Director of Government and Public Affairs.

Depleted Commodity Credit Corporation Funds

During the first Trump administration, trade disruptions cost American farmers $27 billion in lost exports and led USDA to allocate Commodity Credit Corporation (CCC) funds to support impacted farmers.

The CCC is now largely depleted, suggesting that additional funds will need to be appropriated by Congress.

How the USAID Cuts Impact U.S. Producers

Since taking office in January, the Trump administration has moved to cancel, freeze, or rescind billions in federal funding.

One of the initial targets of funding cuts was the U.S. Agency for International Development (USAID). Foreign aid programs are a critical market for American agricultural products. USAID spent roughly $2 billion in fiscal year 2023/24 to purchase commodities from U.S. producers.

Domestically, USDA has also cut programs that provide funding to schools and food banks to buy food directly from local producers.

Producers Reel from Cut in NRCS Project Funding

The proposed budget includes a $754 million cut to private lands conservation operations, increasing the financial burden on producers who are implementing projects through Natural Resources Conservation Service (NRCS) cost-share programs.

Many producers are now facing a significant financial burden as the government’s share of the funding has been cancelled.

USDA Resources Dwindle, Could Spell Disaster for Relief Programs

USDA plans to reduce its workforce by 30,000 employees through buyouts and an upcoming reduction in force.

With many staff already departed or set to leave, USDA’s Farm Service Agency (FSA) and NRCS, already stretched too thin, faces even fewer resources, reducing assistance to farmers with disaster relief, conservation, loan, and commodity price guarantee programs.

In addition to staffing cuts, some USDA authorities have been shifted. Farm loan officers must now receive Department of Government Efficiency (DOGE) approval for loans over $500,000. Combined with hiring freezes and reduced staff, this threatens to delay or disrupt essential USDA relief and loan programs.

The Forecast for Tax Legislation: More Delays Likely

Major portions of the 2017 Tax Cuts and Jobs Act (TCJA) are set to expire. The TCJA was largely viewed as positive for the agricultural sector. Republicans are working to advance a major domestic policy bill that includes tax reform, but deep divisions remain.

While Speaker Mike Johnson aims to push legislation through by Memorial Day, Senate Majority Leader John Thune has stated that deadline is unlikely. House committees continue to struggle with other components of the package, including changes to Supplemental Nutrition Assistance Program (SNAP) benefits.

As a result, we expect significant tax legislation — including updates to expiring provisions of the 2017 Tax Cuts and Jobs Act — will likely be delayed until the third or fourth quarters of 2025.

Farm Bill Reality Check

The farm bill has not been updated since 2018, largely due to partisan disagreements over climate and nutrition provisions. This inaction has left farmers with outdated policies as they face trade disruptions and funding cuts.

Republicans are considering redirecting conservation funds from the Inflation Reduction Act, while also seeking to remove climate-related guardrails. At the same time, House Democrats and some moderate Republicans warn that any effort to slash SNAP benefits will make a new farm bill difficult to pass.

With deep divisions on both climate and nutrition provisions, it remains uncertain whether Congress will be able to pass a farm bill this year or whether it will settle for another one-year extension.

Farm Labor Shortages in Focus

A bipartisan group of House lawmakers on Wednesday reintroduced the Farm Workforce Modernization Act to stabilize the nation’s agricultural workforce and reform visas. The proposal would provide a path to legal status for farm workers and expand the H-2A visa program.

The bill’s reintroduction also comes as momentum builds within the Trump administration to explore a short-term fix for the visa program. Agriculture Secretary Brooke Rollins and Labor Secretary Lori Chavez-DeRemer are working on a plan. However, getting a legislative solution through Congress any time soon will be difficult.

More Cuts Ahead?

The White House has released a partial budget proposal that includes roughly $4.5 billion in cuts to USDA programs. These include eliminating the McGovern-Dole Food for Education Program, which purchases commodities from U.S. farmers and donates them as foreign aid and significantly reducing budgets for NRCS conservation efforts and the National Institute of Food and Agriculture.

“This year marks a pivotal moment for American agriculture in Washington,” said Kuehl.

“It is more important than ever for producers, agribusinesses, and stakeholders to stay closely attuned to policy shifts coming out of Congress and the White House. The decisions made in D.C. over the next several months will shape the future of our industry for years to come.”

The U.S. food and agriculture industry is being significantly impacted by the on-going trade wars, funding cuts, and delays in passing tax reform and the farm bill.  Pinion advisors will continue to monitor impacts on food and agriculture producers and business, and provide timely updates.

If you have questions about these matters, please do not hesitate to reach out to Brian Kuehl, Pinion’s Director of Government and Public Affairs.