A Wisconsin Farmer Learns First-Hand the Costs of Trump’s Tariffs

My local farm supply business in Cadott quoted me $25 to treat an approximately 50-pound bag of soybeans with a coating that includes heads up (for white mold) nematiside inoculant, fungicides and insecticides to protect the seedlings. For the 560 bags of seed I would need this seemed high, so I sought a better, cheaper alternative.

Online, I found a domestically sold seed treater for $50,000, while a computer-controlled model cost $63,000. No wonder treatment costs $25 a bag, I grumbled.

Then I saw an ad for a seed treater on Made-in-China.com. The company quoted me $7,800 for their seed treater. With additional options like computer control, an extra biologicals bucket, a storage cabinet and a top hopper added in, plus shipping, the machine came to $12,810. Finally, something I can afford, I thought.

However, when I asked about tariffs, Cathy, the factory sales rep at Kaifeng Machinery, in Kaifeng, Henan province, was hesitant. Tariff rates fluctuated so much that no one knew what Trump would impose next. In February and March, China had responded in kind to Trump’s tariffs, levying duties on American agricultural machinery and key farm exports like soybeans.

Talking to a customs broker before Trump’s April 2 tariff announcement speech, and shortly before the factory finished manufacturing the seed treater. I learned  the cumulative tariff at the time totaled 45%, including 25% from Trump’s tariff war in 2018 plus 20% imposed by Donald Trump on March 4. That added $5,764.50 to my cost, bringing the total to $18,574.50.

Then in the wake of Trump’s so-called “Liberation Day” (April 2), which imposed an additional 34% tariff on Chinese imports, China suspended some U.S. agriculture imports like sorghum and poultry.

In response, on April 8, Trump announced he would raise tariffs on China to a total of 104% if China did not remove its tariffs, which China refused to do. Consequently, on April 9 (my birthday), thanks to Trump, the total cost of my seed treater had risen from $12,810 to $26,132. (Later that day, Trump announced he would pause the “Liberation Day” tariffs for 90 days. At the same time he raised the cumulative tariff on China to 125%, while keeping in place the 10% universal tariff and the 25% tariff on both Mexico and Canada.)

This kind of uncertainty and the skyrocketing costs associated with these tariffs means that it will take me an extra four years to pay for the treater, and, consequently, I will have less money to invest elsewhere in my business. Multiply this millions of times nationwide, and the result is trillions of dollars lost, with fewer jobs, products, goods and services for everyone in the country.

Three Scenarios Where Tariffs Make Sense

As a farmer, I think tariffs serve an important role in our economy. Few nations can compete with U.S. agricultural production, yet virtually every country knows it is important to have the ability to feed themselves in the event of a major supply chain disruption. There are three scenarios where tariffs can make sense.

1. Protecting National Security: Many countries impose tariffs on agricultural goods to ensure they can sustain their populations during supply chain disruptions. A tariff is implemented to preserve production of items critical to national security. For instance, the U.S. has imposed tariffs on critical materials like steel to maintain self-sufficiency. Governments can also levy a tariff on products that could endanger the population, such as imported beef tainted with a disease. These tariffs tend to be minimal, preserving competition and fostering innovation.
2. Promoting Fair Trade: When companies invest in developing proprietary products, foreign competitors sometimes copy them and sell counterfeits at lower prices. Tariffs on such products encourage compliance with international law and protect legitimate businesses. At the same time, cheap imports can undercut domestic industries, forcing companies to shift production abroad to cut costs.
3. Fostering Economic Development: Tariffs can serve as a tool to protect and nurture vital domestic industries, especially in developing or transitioning economies. The idea is that certain sectors—such as manufacturing or agriculture—may struggle to compete with more mature foreign industries. Temporary tariffs can give these domestic sectors the space to grow, invest in productivity, and create stable jobs without being undercut by cheaper imports. This strategy, often called “infant industry protection,” has historically played a role in the development of strong economies, including the U.S., South Korea, and Germany. Tariffs can also be used to preserve industries that are essential to a country’s economic health and the livelihoods of large numbers of workers, particularly in regions hit hard by globalization and deindustrialization.

Trump’s Tariff Approach

In contrast to these scenarios, Trump’s approach is to place a 10% across-the-board tax on all imports, while placing additional tariffs on imports from about 90 countries (although these additional tariffs are paused for now). Agriculture is highly dependent on trade, so it is important to examine its impact on farmers.

On the whole, raw agricultural inputs, including fertilizer, tractors, planters, crop protection products and seed, are cheaper to import. At the same time, few nations can compete with the United States in the volume, quality and production cost of agricultural outputs. As a nation we buy our agricultural inputs and sell our agricultural outputs.

The problem with declaring a global trade war is that inputs will cost much more, while retaliatory tariffs on U.S. exports make agricultural outputs more expensive abroad.

Some may be thinking: “What about domestic producers of agricultural inputs? They will keep the price down! After all, Donald Trump just wants to promote well-paying United States industry.” The answer to that is: “No! They will not keep prices down.” The rule of business in a capitalist system is to make as much money as you can. If your foreign competitor’s raw inputs cost 25% more, you will charge 24% more to ensure that your business can not only compete but also maximize your profits.

For example, Canada placed a 25% retaliatory tariff on U.S. grain. The result is that Canadian buyers will turn to another country such as Brazil, where grain costs only 5% more than Canadian grain due to transportation. This is still far cheaper than paying an additional 25% tariff on U.S. grain. Consequently, American farmers will have to drop their prices by at least 20% to compete with the cheaper Brazilian grain.

Even before Trump’s latest trade war, the average corn farmer in the U.S. lost $100 to $125 per acre due to rising input costs, while prices for major commodity crops like soybeans and corn have plunged roughly 40% since 2022. This was partly the result of Trump’s first trade war, which allowed Brazil and Argentina to as major competitors to the U.S. in the global soybean market.

Under Trump’s new tariffs, some estimate farmers could lose $300 to $400 per acre. A 25% increase of production costs and 20% in revenue would result in a 45% hit to farmers’ margins, which will devastate the industry.  

Losses of this scale have not been seen since the Great Depression when agriculture collapsed, and widespread famine followed. Malnutrition from the crisis was so severe that one-fourth of World War II draftees were rejected due to poor health.  

Regardless of opinions on the policies of Franklin Delano Roosevelt and the New Deal-era Democrats, FDR did everything he could to bring food and other necessities to people. By contrast, today’s leadership has shown little concern for the consequences of reckless tariffs. Without a strategic purpose, these broad tariffs will continue to harm businesses, farmers and the entire U.S. economy.

Mark PeckMore by this author →

Mark Peck is a fourth-generation farmer in Chippewa Falls, Wisconsin. He has received degrees in agronomy and animal science from Chippewa Valley Technical College, and is currently enrolled in classes on international politics at the University of Wisconsin-Eau Claire. His family moved to northern Wisconsin in the 1930s but went bankrupt many times until they ended up in Chippewa Falls in the late 1940s.