The World Is Better When America Leads in Agriculture

In the first few weeks of his second term, President Donald Trump created headache after headache for agricultural communities. From nominating health quack Robert Kennedy Jr. to head the Department of Health and Human Services to launching and then pausing tariffs on Mexico and Canada, the Trump administration has kept farmers and observers of U.S. agriculture on their toes.

As focus shifted in the past few weeks to trade relations with China, the impending reform (or repeal) of the Inflation Reduction Act, and new tariffs on steel and aluminum imports, some of that agriculture-related concern has waned. But, with tariffs on Mexican and Canadian goods still on the menu for later this month, U.S. farmers are still waiting to exhale.

United States agriculture produces almost everything, and does so more efficiently and with less environmental impact than other top producers. But overall the industry is dominated by livestock, grain, dairy and commodity crops. The United States exports the surplus of those products—often as raw ingredients or inputs into other products—and imports lots of fruits, vegetables, and products like cheese, wine, and beer. Tariffs on Canada and Mexico will impact the prices of those everyday food items. Retaliatory measures threaten to undercut America’s largest producers and challenge their main source of comparative advantage—large-scale, efficient production of commodity products.

Commentators from Center for American Progress to Mitch McConnell have outlined the outsized expected impacts of Trump’s proposed tariffs and the likely retaliatory tariffs from our trade partners to the north and south. For consumers, prices on food are likely to go up, contradicting Trump’s promises to end inflation. For producers, tariffs threaten export markets and the almost $60 billion in agricultural sales to Canada and Mexico. Indeed, consumer pain and producer unprofitability are almost certain.

What is less certain are the long-term consequences of the proposed tariffs on U.S. agriculture. Can tariffs really reshape American agriculture into an “America First” farm system? Can abrupt trade policy incentivize shifts in production from commodities like corn and soybeans to higher value crops? Can tariffs bring American farmers out of a supposed race-to-the-bottom competition with commodity crop producers in places like Brazil, where they can undercut U.S. farms on cost and drive down prices?

The answer to all of the above is “maybe”, but not without a great deal of pain in the short term. And even if it succeeds, the long-term consequences of trying to accomplish such a feat through significant and prolonged tariffs would likely be a diminished U.S. agricultural sector, long-term price inflation for American consumers, and far more global emissions and deforestation stemming from agricultural production.

We Don’t Export What We Import

Although the United States has long been the global leader in agricultural exports, recent years have seen the balance shift, with greater growth in agricultural imports—mainly fresh produce, cheese, beer, and wine. In fact, in 2025 the United States is projected to see its largest agricultural trade deficit in recent history. While U.S. exports will reach close to $170 billion, imports will skyrocket to over $200 billion.

Mexico, Canada, and China remain the top importers of U.S. agricultural goods, with projected totals of $29.9 billion, $29.2 billion, and $23.3 billion, respectively, in 2025. Altogether, these three countries receive just under half of all U.S. agricultural exports.

On the other side of the coin, Canada and Mexico are projected to originate just over $90 billion in U.S. imported agricultural goods in 2025—Mexico is projected to be the leading food exporter to the U.S. with just under $50 billion. Canada is second, with about $42 billion in food exports to the United States. China is not a significant food exporter to the United States, with only about $6 billion in total food exports.

The USDA categorizes just about a quarter of U.S. agricultural exports as “horticultural products,” which includes fresh fruits and vegetables, as well as some processed products like beer and wine. Livestock, dairy, and poultry products; grains and feeds; and oilseeds and products each account for about a quarter of exports, and “sugar and tropical products” making up the small remainder.

On the other side of the ledger, a little more than half of U.S. imports are “horticultural products.” The remaining imports are fairly evenly distributed amongst the remaining categories (see chart below).

In short, the United States overproduces (and sends to other countries) livestock, grains, and oilseeds. It underproduces (and imports from other countries) a lot of what we actually think of as food: fruits, vegetables, cheeses, yogurt, meat, and other goods we purchase at the grocery store.

A prolonged trade war with Canada, Mexico, and China could shift that balance, disincentivizing commodity crop production—soybeans, corn, etc—in favor of production of fruits, vegetables, and value-added lightly-processed foods.

To understand why, look at avocados. Americans consumed about 3 billion pounds of avocados in 2023. The vast majority of those avocados are grown in the Mexican state of Michoacan. A trade war that raises the price of imported avocados could incentivize some producers—mainly in places like California, Hawaii, and Florida—to produce them at home, and thus take advantage of high costs in the short term while growing a larger American avocado industry.

But the sheer growth needed for U.S. avocado production to come close to competing with Michoacan would be massive. In 2023, U.S. avocado producers grew and sold around 500 million pounds of avocados. In the same year, Mexico sold just over 2 billion pounds of avocados. To make up just half the total of Mexican imports Americans ate last year in addition to current production, U.S. farmers would have to grow the domestic avocado industry three-fold.

Growing more is not a matter of snapping one’s fingers. Farmers with the agronomic profile and access to the right equipment to grow avocados either are already doing so or are growing other specialty crops like citrus. The farmers and producers who will be losing grain, oilseeds, or livestock product sales, for the most part, will not be able to shift production to tropical fruits or vegetables. No matter how large a tariff Trump slaps on Mexican avocados, Iowa will remain Iowa. Michoacan will remain Michoacan.

There is room at the margins for shifting production. Perhaps tariffs could help dairy producers—who have long struggled due to punishingly thin margins—take advantage of Americans’ apparently insatiable appetite for cheese and other dairy products that would otherwise be imported.

But the fact of the matter is that while U.S. agriculture is a massive, diverse industry that efficiently produces a wide variety of products, the country’s real competitive advantage lies in commodity grain, soy, and livestock products that are grown hyper efficiently in the center of the country. Some of that production can be shifted, but not to a high degree.

The Rise of Brazilian Farmers

American agriculture, long the breadbasket of the world, has been under threat for some time by international competitors, a threat exacerbated by recent trade wars. Concerted efforts from competitors around the world have brought foreign producers within striking distance of U.S. agriculture. Brazil, with its vast swaths of arable land and fertile soil in the Amazon basin and large-scale entrepreneurial farms, appears almost on even footing with the United States when it comes to agricultural competitiveness.

The massive growth in Brazilian agriculture in the past decades is the culmination of a set of national and regional policies combined with an activist agricultural sector built around huge estates that can wield economies of scale to boost productivity and invest in technological improvements. Brazil also got a boost thanks to Trump’s 2018 tariffs on China.

During the ensuing trade war, China replaced U.S.-produced goods by turning to Brazilian agricultural products. Between 2019 and 2023, Brazilian exports to China of oilseed and grain—primarily soybeans—increased by 19% annually.

U.S. agricultural exports have bounced back since the last trade war, but growth has been historically slow—and particularly slow compared to Brazil.

But how has Brazil been able to expand production so rapidly?

Mainly, through farmland expansion. In 2010, Brazilian farmers harvested soybeans on 23 million hectares. By 2023, soybean production in Brazil reached 44 million hectares, increasing by an area roughly the size of Ohio and Indiana combined in just thirteen years. In comparison, over the same period, American farmers increased soybean production by just over 2 million hectares.

Brazilian producers have also been able to keep up with, and even overtake their American counterparts when it comes to yields. But the majority of Brazil’s new advantage in soy production stems directly from expanded soybean production.

In 2018, the share of U.S. soybeans going to China dropped from around 60% to 18%, and never fully recovered. Brazil was able to take advantage of the 2018 trade war and become China’s primary agricultural trade partner. 2016 was the last year that the U.S. exported more soybeans than Brazil. While Brazilian exports have almost doubled since then, U.S. soybean exports have declined.

Brazil’s race to win the soybean market indicates some real shifts in the global balance of agricultural power away from the United States. But this is not to say that the era of American dominance in agricultural exports is over. Equally, Brazilian growth should not bait the United States into a new race to the bottom when it comes to agricultural trade and commodity production.

Rather, what the United States needs to do is find new markets for surplus agricultural production while incentivizing agricultural improvements at home. Brazilian producers can continue to expand soybean harvests while increasing yield. To compete, American farmers must be able to outperform on yields. Tariffs with Mexico and Canada, as proposed by Trump, could shift production to be slightly more in line with domestic consumption, but they’re more likely going to isolate the United States from key allies while punishing both American farmers and consumers. Tariffs will do little in the way of aiding producers in competing with Brazil, or whoever else hopes to take a bite out of the U.S. agricultural export market.

The World is Better When America Leads in Agriculture

The economic consequences of the proposed tariffs are real. In 2018, retaliation to Trump’s tariffs on Chinese goods cost U.S. farmers somewhere between $27 and 30 billion in lost export sales. In exchange, the Trump administration ushered in $28 billion in “emergency” payments to U.S. farmers—more than the federal government spent in 2018 on the Department of State, or the entire nuclear weapons program. In 2025, tariffs have a chance of being worse.

Yet commentary on the inflationary pressure that tariffs will have on consumers, or the squeezing of the American farmer miss out on the larger consequences of American agricultural isolationism. U.S. farm products are key to reducing greenhouse gas emissions related to agriculture and to relieving pressure on ecosystems around the world.

World-leading agricultural efficiency has kept U.S. farmers globally competitive in agricultural trade. Efficiency has also meant that the United States can produce more agricultural goods on less land and with fewer greenhouse gas emissions. Across the range of farm products, this country is among the most greenhouse-gas efficient producers.

So when U.S. products are replaced in global export markets, not only do U.S. farmers miss out, but the global environmental impacts of agriculture get worse.

This is mainly due to the fact that the U.S. has been able to increase yields and expand production without increasing land-use. While competing agricultural exporters have similar, and in some cases, lower emissions related to input use, they have far worse impacts related to land-use change from farmland expansion—as much as 8.5 times more than the United States. Brazilian soybean production, for example, matches U.S. production when it comes to yield, but farmland expansion into the Amazon makes their product significantly more emission-intensive than soybeans from the United States.

Some of this comparative climate advantage for the United States simply comes from the fact that much of U.S. arable land has already been put into agricultural production. That is, the emissions and deforestation from cropland expansion in the United States already happened. While there are benefits, both locally and globally, to rewilding some of that land, there are far more from simply preventing deforestation or otherwise expanding cropland into areas with significant carbon sinks and biodiversity.

Of course, optimizing U.S. agriculture to feed the world solely for the environmental benefits at the expense of domestic consumers would also have negative consequences. Balancing U.S. domestic requirements with an eye to global consumption patterns requires maintenance of American agricultural export dominance with careful measures to reduce U.S. dependence on imports of value-added goods and niche produce. The United States can be a leading exporter of beef, corn, and soybeans while also relying less on Mexico for avocados or France for cheese and wine. But drastic, crisis-inducing tariffs are likely not the way to do that.

What’s the Point?

The goal of Trump’s proposed tariffs was never to completely reform U.S. agriculture or turn American food production on its head. Rather, Trump intended to use the tariffs to shift the balance of power between the United States, its allies, and China at the bargaining table for a raft of other, non-agricultural, interests.

Whether his strategy works is yet to be determined.

It is equally unclear how the Trump administration might weigh policy trade-offs that get in the way of some of its goals. Can Trump and his advisors see past immigration negotiations or Chinese competition and understand both the short- and long-term ramifications of tariffs or other policy decisions?

With the apparently effortless dismantling of USAID and the ignorance of ramifications on U.S. producers who sell food products for aid and the hungry people around the world who rely on that aid, the likelihood is that Trump’s short-term politicking will ultimately win out. Still, as the new administration bends, and sometimes breaks, existing institutions, the Overton window opens wider.

The ongoing tariff fiasco reframes the American agricultural system and its overproduction of commodity crops and underproduction of what U.S. consumers actually want in ways that alternative food advocates and activists could only dream of. Clearly there is room for change in how American producers feed the United States and the world, but a trade war is not the way to make that change.