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      This pause in the trade war will be brief. Small businesses, plan accordingly

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      Donald Trump’s massive Chinese tariffs are on pause. The media debated. Wall Street rejoiced. Many of my clients breathed a sigh of relief. Big retailers jumped for joy. But for how long?For starters, the tariffs that weren’t paused – a 10% levy on all Chinese goods, plus a bonus 20% tax that somehow relates to fentanyl, are still in place. When you take into consideration existing tariffs on steel from previous Trump and Biden administrations, the effective tariff rate on Chinese goods is actually closer to 40%, according to an analysis done by the Wall Street Journal.That’s a big number. Maybe that won’t deter people from buying underwear at Target. But for companies that rely on steel and aluminum, semiconductors, synthetic fabrics, plastics, minerals, coatings and solvents as well as certain bearings, motors, pumps and parts, a 30-40% hike is a major impact on their margins, which will affect their spending and investments. Ultimately, the costs of the end products that use these materials will also rise as companies simply pass them down.Just as important, Trump’s animosity towards China – unfounded or not – isn’t going to just magically disappear. He’s called the Chinese cheaters, polluters and thieves. And his past actions – particularly in his first administration – do not bode well for a quick resolution to this issue.In 2018, the Trump administration not only imposed onerous tariffs on China but also issued some very harsh requirements to address trading issues with its closest economic rival.There were specific quotas set to limit our trade deficit. There were demands made to reduce the Chinese requirement forcing American companies to share or transfer technology with their Chinese counterparts. There were rules aimed at stopping the alleged (ha, ha) stealing of data and intellectual property by the Chinese.The problem is that none of this happened. What happened – shortly after the negotiations started – was Covid. And then 2020 and a new administration. But don’t think that Trump won’t raise these issues again. He will, and when this happens we’ll be back to the same place we started: excessive tariffs and a trade war with China.That doesn’t mean that businesses are completely stuck. Many – those that have the funds – are using the tariff suspension to buy up products from China like it’s a fire sale at Costco on Black Friday. Others are contracting with bonded warehouses and storage facilities in free-trade zones to accept products that are temporarily tariff-free, hoping that when they pull materials from these storage units those rates will have come down.I have clients who are aggressively searching for alternative suppliers. I have others who are bringing their assembly and manufacturing back to the US. Those that aren’t able to make these kinds of investments are trying to work out how and how much they can change pricing and what the market will take. A few have already created special line items on their invoices to separate out the tariff charge in an effort to say: “Hey, don’t blame me for this stuff!”My smartest clients started doing this stuff the day after Trump was elected. They listened to what he’d said during the previous couple of years. They read the writing on the wall. Now they’re ahead of the game. Good for them.Companies that didn’t do this – especially small businesses that have fewer resources and are more reliant on just a supplier or two – are in trouble, particularly if they buy from China. For any business still reliant on Chinese suppliers and markets, this pause isn’t going to last as long as you think. There will be a lot more coming in this trade war – and let’s hope it doesn’t turn into an actual war. The outlook is precarious and risky. Trump is volatile and emotional and has a history of knocking China. Plan accordingly. More

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      Gone in 40 days: how Trump’s ‘liberation day’ tariff assault unraveled

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      Donald Trump hailed a new chapter in the US’s economic history on 2 April, dubbed “liberation day” by his administration, as he announced plans for an extraordinary barrage of US tariffs on the world. The chapter lasted 40 days.The page has already been turned. But the impact of those six chaotic weeks, from higher prices to slowing growth, is still unfolding – and the US president is already threatening further adjustments. The story continues.Trump had been steered away from his aggressive instincts on trade during his first term, and persuaded to walk back several tariff threats in the opening months of his second. But back in early April, he was determined to plough ahead.“April 2nd, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” Trump declared at an event in the White House Rose Garden, before an audience of his top officials and supporters.The measures were blunt and severe: a blanket 10% tariff on all imported goods, and higher individualized rates, of up to 50%, on dozens of markets – those of economic allies and rivals alike – deemed to have treated the US poorly on trade.‘Be cool’First came the questions. How exactly did the Trump administration come up with such an array of specific duties to impose upon goods from so many countries and territories? And why was a group of barren, uninhabited islands near Antarctica among them?Then came the panic. Global stock markets tanked, with Wall Street enduring its steepest falls since the onset of the Covid-19 pandemic five years ago, as the president repeatedly insisted he was serious this time.Trump’s officials were sent out to hold the line. “The announcement today is the most significant action on global trade policy that has taken place in our lifetimes,” said Stephen Miller, his deputy chief of staff for policy. “We’re just going to have to wait and see” what happens, the treasury secretary, Scott Bessent, told Bloomberg. One thing’s for sure, the commerce secretary, Howard Lutnick, told CNN: “The president is not going to back off.”On day five of the new chapter, the 10% baseline tariffs came into force. On day seven, the higher, individualized rates followed. Beijing vowed to retaliate. Business leaders, including some who had backed Trump’s run for the White House, urged him to reconsider.A sell-off in treasury bonds, typically deemed a safe haven during periods of economic volatility, took hold. “BE COOL! Everything is going to work out well,” Trump wrote on Truth Social, adding a few minutes later: “THIS IS A GREAT TIME TO BUY!!! DJT”This advice seemed prescient four hours later. Seven days into the new chapter, with his individualized tariffs imposed for all of 13 hours, Trump announced a 90-day pause – in effect reducing the universal duty on all US imports from almost all countries to 10% – and markets surged higher.Almost all countries, that is, except China. Beijing’s pledge to hit back infuriated the president, who blamed its “lack of respect” as he announced a new US tariff of 125% (in effect, once other duties were included, 145%) on Chinese goods. It retaliated in kind.Getting yippyThe same officials who had been dispatched to defend Trump’s initial plan were sent out again, to explain his latest climbdown.“You have been watching the greatest economic master strategy from an American President in history,” Miller claimed on X.“Many of you in the media clearly missed The Art of the Deal,” the press secretary, Karoline Leavitt, scolded reporters, referring to the president’s 1987 bestseller, in which the real estate tycoon presented himself as a consummate dealmaker.While his aides claimed that more than 75 countries had been in touch following his initial tariff announcement, even the president struggled to present the reversal as part of a carefully orchestrated negotiating strategy. Asked what had prompted it, Trump told reporters people had been “getting a little bit yippy” about his plan.But some of the US’s largest companies were still feeling pretty yippy. Apple, for example, relies on factories in China to churn out the iPhone, which is responsible for almost half its business.Late on day 10, away from the noisy press gaggles and all-caps social media posts, US Customs and Border Protection posted a list of products that would be exempt from the Chinese tariffs – including smartphones, computers and semiconductor chips.While the administration had walked back much of Trump’s initial plan, concern lingered over what remained. Trump maintained that high tariffs were the way forward, but fears of widespread shortages and dramatic price increases loomed large. Polling made clear consumers were increasingly concerned.On day 28, at the end of a cabinet meeting, the president tried to play down the risks of his assault on China. “Well, maybe the children will have two dolls instead of 30 dolls, you know,” he said. “And maybe the two dolls will cost a couple of bucks more than they would normally.”Blame gameEarlier that morning, dismal economic figures for the first quarter had underlined how – as the last chapter drew to a close – the mere threat of Trump’s economic assault appeared to dent growth. US gross domestic product (GDP) shrank for the first time in three years, abruptly turning negative after a spell of robust growth as imports surged 41% while companies scrambled to pre-empt tariffs.Trump raced to pin the blame on his predecessor. “I think the good parts are the Trump economy and the bad parts are the Biden economy,” he told NBC’s Meet the Press.Many economists said the growth decline in the first quarter, as firms braced for Trump’s new chapter, raised troubling questions about the second, when the president finally launched it at his “liberation day” event.Aside from dolls, the administration started to indicate it might be willing to adjust tariffs on China that were hitting goods – like baby car seats and cribs – that the US almost entirely imports from the country. Such exemptions were “under consideration”, Bessent told Congress, potentially averting a spike in prices for young families.But as the weeks drew on, after promising his trade strategy would prompt countries around the world to trip over themselves to strike deals with the US, Trump was finding it harder to explain why none had materialized.On day 34, as questions mounted, he complained the media had become fixated. “You keep writing about deals, deals,” he said, adding that he wished journalists would stop asking. “Some deals” would be signed, the president said, but tariffs were a “much bigger” focus.On day 36, the first deal was declared done. Trump summoned back reporters to unveil what he called a “maxed-out deal that we’re going to make bigger” with the UK. In reality, there was still work to do: both he and Keir Starmer, the British prime minister, conceded certain details had yet to be finalized.By the next morning, Trump’s focus had returned to China. Bessent was preparing for talks with the country’s officials in Geneva, fueling hopes that the world’s two largest economies might lower their eye-watering tariffs. “80% Tariff on China seems right! Up to Scott B,” the president wrote on social media.‘This is going to crush us’Trump was also watching the liberal MSNBC network, where the business commentator Stephanie Ruhle argued his strategy on tariffs was not working. “You’re seeing day in, day out, more business leaders – whether it’s Warren Buffett, or Jamie Dimon, or Ken Griffin, on big global stages – saying this is going to crush us economically,” she said. “And then you’ve got congressmen, senators, from every state saying to this White House: our small businesses are … dying here.“I’m not saying Donald Trump has changed what he thinks in his heart. But he’s backed into a corner, and he needs to get off this crazy tariff train, and he knows it.”Trump punched back. “Few people know Stephanie Ruhle, but I do, and she doesn’t have what it takes,” he wrote on Truth Social, accusing her of lies. “We’re going to make a fortune with Tariffs, only smart people understand that, and Stephanie was never known as a ‘High IQ’ person.”If only smart people understood the US stood to make a fortune from tariffs, they might have been surprised by what happened next.Away from TV studios, some of the most senior people in the White House, including the chief of staff, Susie Wiles, reportedly started to warn the president of risks not unlike those laid out by Ruhle. “The key argument was that this was beginning to hurt Trump’s supporters – Trump’s people,” one person briefed on internal conversations told the Washington Post. “It gave Susie a key window.”On day 40, after discussions in Geneva, Bessent confirmed that US and Chinese officials would drastically reduce the tariffs they had aggressively ratcheted up just a few weeks before. With US tariffs on Chinese goods falling to 30%, Trump hailed a “total reset” in relations between Washington and Beijing.The reversal, although far from a total reset, confined the latest “liberation day” measure to history.2 April 2025, is not yet remembered as the day American industry was reborn. Much of what was announced that afternoon has already died.The page has been turned. On Friday, Trump claimed about 150 countries would soon receive letters “essentially telling” them of new US duty rates on their exports. Many learned of similar rates last month, only for the plan to change in a matter of days.A new chapter, without pomp or ceremony, is now under way. What this one will entail – or how long it lasts – is anyone’s guess. More

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      China and US agree 90-day pause to trade war initiated by Donald Trump

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      China and the US have agreed a 90-day pause to the deepening trade war that has threatened to upend the global economy, with reciprocal tariffs to be lowered by 115%.Speaking to the media after talks in Geneva, the US treasury secretary, Scott Bessent, said both sides had shown “great respect” in the negotiations.Bessent said: “The consensus from both delegations this weekend was neither side wants a decoupling.”The 90-day lowering of tariffs applies to the duties announced by Donald Trump on 2 April, which ultimately escalated to 125% on Chinese imports, with Beijing responding with equivalent measures.China also imposed non-tariff measures, such as restricting the export of critical minerals that are essential to US manufacturing of hi-tech goods.The US trade representative, Jamieson Greer, said China’s retaliation had been disproportionate and amounted to an effective embargo on trade between the world’s two biggest economies.With the 115% deduction, Chinese duties on US goods will be lowered to 10%, while the US tax on Chinese goods will be lowered to 30%. That is because the US tariffs include a 20% rate imposed by Trump before the latest trade war, which the president said was related to China’s role in the US’s fentanyl crisis. The fentanyl-related tariff will still apply.A spokesperson for China’s ministry of commerce said: “This move meets the expectations of producers and consumers in both countries, as well as the interests of both nations and the common interest of the world.“We hope that the US side will, based on this meeting, continue to move forward in the same direction with China, completely correct the erroneous practice of unilateral tariff hikes, and continually strengthen mutually beneficial cooperation.”China’s yuan jumped to a six-month high on the signal that the trade war would be paused. Up to 16m jobs were at risk in China, according to some estimates, while the US faced rising inflation and empty shelves thanks to dizzying tariffs on the biggest supplier of US goods.Bessent said he was impressed by the level of Chinese engagement on the fentanyl issue during the talks in Switzerland. “For the first time the Chinese side understood the magnitude of what is happening in the US,” Bessent said.A joint statement published by the US and China on Monday said that both sides would “continue to advance related work in a spirit of mutual openness, continuous communication, cooperation and mutual respect”.William Xin, the chair of the hedge fund Spring Mountain Pu Jiang Investment Management, told Reuters: “The result far exceeds market expectations. Previously, the hope was just that the two sides can sit down to talk, and the market had been very fragile. Now, there’s more certainty. Both China stocks and the yuan will be in an upswing for a while.”skip past newsletter promotionafter newsletter promotionHu Xijin, the former editor of the nationalist Chinese tabloid the Global Times, said on social media the agreement was a “great victory for China in upholding the principles of equality and mutual respect”. Hu noted on Weibo that the recently agreed UK-US trade deal maintained the US’s 10% tariff on UK imports, “while the UK did not implement reciprocal measures”.Wang Wen, the head of the Chongyang Institute for Financial Studies at Renmin University in Beijing, said: “This is an unexpected achievement in Sino-US tariff negotiations.”However, Wang also urged caution, as he said the agreement “does not represent the resolution of the structural contradictions between China and the United States, nor does it mean that there will be no friction and serious differences between China and the United States in the future”.Stock markets across Europe rose in the aftermath of the US-China announcement. Germany’s DAX index jumped by 1.5%, with Mercedes-Benz, Daimler Trucks and BMW among the biggest risers. France’s CAC index rose by 1.2%.Additional research by Lillian Yang More

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      White House claims China trade deal reached after ‘productive’ Geneva talks

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      The White House has announced that a trade deal with China has been struck after two days of talks in Geneva.The announcement on Sunday came after the US treasury secretary, Scott Bessent, told reporters that there had been “substantial progress” in talks between his team and that of the Chinese vice-premier, He Lifeng, in Geneva on defusing the trade war between the world’s two largest economies sparked by Donald Trump’s 145% tariffs.At a news conference later on Sunday, He, the top Chinese trade official, called the talks “candid” and said substantive progress had been made to reach an “important consensus”, according to China’s state-run media. The two sides will issue a joint statement agreed during the talks, the vice-premier said.In televised remarks that were posted on social media by the White House, Bessent said he would give more details on Monday, “but I can tell you that the talks were productive”.“I’m happy to report that we’ve made substantial progress between the United States and China in the very important trade talks,” Bessent told reporters.The US trade representative, Jamieson Greer, who spoke alongside Bessent, suggested more strongly that a deal had been reached.“It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought,” Greer said.“Just remember why we’re here in the first place,” he added. “The United States has a massive $1.2tn trade deficit, so the president declared a national emergency and imposed tariffs, and we’re confident that the deal we struck with our Chinese partners will help us to resolve, work toward resolving that national emergency.”Bessent said he had informed Trump of the progress of the talks.The meeting was the first face-to-face interaction between Bessent, Greer and He since the world’s two largest economies imposed tariffs well above 100% on each other’s goods.Although Bessent has said the bilateral tariffs were too high and needed to come down in a de-escalation move, he did not offer any details of reductions agreed and took no questions from reporters.On Saturday night, Trump wrote on his social media platform that the two sides were working on “a total reset … in a friendly, but constructive, manner.”“Many things discussed, much agreed to,” Trump posted. “We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!,” Trump added. Trump’s rhetoric, that China needs to be “opened” to US business seemed to ignore a half century of trade between the two nations since one of his political heroes, Richard Nixon, visited China in 1972.The US commerce secretary, Howard Lutnick, confirmed to CNN that the US will continue to keep “a 10% baseline tariff to be in place for the foreseeable future” even on imports from nations the US strikes new trade deals with.On Sunday, Kevin Hassett, the director of the National Economic Council, said: “What’s going to happen in all likelihood is that relationships are going to be rebooted. It looks like the Chinese are very very eager to play ball and renormalise things … they really want to rebuild a relationship that’s great for both of us.”Last week, Trump and the UK prime minister, Keir Starmer, announced a limited bilateral trade deal.Hassett said the UK agreement provided a “really exciting blueprint” and that he had been briefed on 24 deals with other countries that are in the works. “They all look a little bit like the UK deal but each one is bespoke,” he said.Meanwhile, Lutnick dismissed reports of dock workers and truckers losing their jobs as a result of the tariffs.“This is just a China problem right now,” Lutnick said. “The rest of the world is 10% [tariffs]. So don’t overdo it.”“Prices are going to stay stable once this policy is done,” Lutnick added.Reuters contributed reporting More

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      Why is Trump so fixated on toys for little girls? | Moira Donegan

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      Donald Trump has found a new target for his trademark mockery and dismissal: little girls.In comments at a 30 April cabinet meeting, the president seemed to dismiss the economic impact of his chaotic tariff regime on American consumers by citing girls as the primary complainants. “Somebody said, oh, the shelves are going to be open,” Trump said. “Well, maybe the children will have two dolls instead of 30 dolls. And maybe the two dolls will cost a couple bucks more than they would normally.”Trump is prone to odd non-sequiturs, but the dolls have become something of a sticking point. Onboard Air Force One on 4 May, he doubled down on his insistence that American girls should have fewer toys. “All I’m saying is that a young lady, a 10-year-old girl, nine-year-old girl, 15-year-old girl, doesn’t need 37 dolls,” he told reporters. “She could be very happy with two or three or four or five.”In an interview with Kristen Welker of Meet the Press that same day, Trump again mentioned the dolls. “I don’t think a beautiful baby girl needs – that’s 11 years old – needs 30 dolls,” Trump said. “I think they can have three dolls or four dolls because what we were doing with China was just unbelievable.” He went on to assert that American children also have too many pencils. “They don’t need to have 250 pencils. They can have five.”In some respects, the comments seem like a rare bit of honesty from the president: an acknowledgment of the reality that his tariffs will hurt consumers and lower the American their standard of living. With steep tariffs on many consumer goods, particularly those made in China, and supply chain issues caused by retailers and producers frantic attempts to offset the costs of the new tariffs, many common products – yes, including children’s toys – will become shorter in supply and steeper in cost. Because of Trump’s policies, it is indeed true that there will be fewer presents for children underneath American Christmas trees this year – a trend that is likely to continue for years to come if Trump’s trade war triggers an economic recession, as is widely expected. Americans themselves don’t have much say in this, but Donald Trump wants us all to know that he’s comfortable with us, and our children, having less.But the selection of dolls, in particular, as Trump’s stand-in for consumer prices reflects the gendered ideas about work, money and purchasing that animate Trump’s chaotic economic policy. After all, Trump did not talk about the impact of his trade regime on toy trucks or GI Joe action figures – and he certainly didn’t mention its likely impact on things like video games, basketballs, squat racks or protein powders. The tariffs will increase prices across economic sectors and hurt consumers of all kinds of goods. But Trump did not speak in general terms about those who might like to buy a house one day, or about who will be hurt by his tariffs on Canadian lumber, or about those who would like to be treated for their illnesses but who have to pay steeper prices for the medicines they need when tariffs hit pharmaceuticals. He didn’t talk about any of the consumption that Americans are uniformly agreed to think of as reasonable, dignified or aspirational. He chose, instead, something seen as trivial, childlike, and only for girls.The comments aim to cast the pain that consumers will face as ultimately feminine and frivolous, their complaints petulant and childlike. In this respect, Trump is drawing on a long tradition of economic rhetoric that aims to cast consumption as feminine, decadent and morally suspect – and to contrast it with the supposedly more manly and virtuous productive side of the economy. It’s a laughably stupid symbolism, one that only works for those deeply committed to their ignorance about how the economy actually works: in truth, everyone consumes, and people of all genders participate in the productive economy. But Trump does not argue based on the facts: he asserts dominance. And here, he casts those Americans who would complain about the economic pain that he is inflicting on them as feminine and hence as contemptible, deserving no more respect than spoiled children.The project of masculinizing the economy – perhaps especially at children’s expense – is one that the Trump administration seems to be pushing more broadly. Trump claims, despite the near-universal assertions of economists to the contrary, that his tariffs will shift the US away from the primarily female service sector industries that have dominated the American economy since the 1970s back to a more masculine manufacturing base.To this end, his commerce secretary, Howard Lutnick, a billionaire former CEO, went on MSNBC late last month to describe his vision for the future of the American worker. “It’s time to train people not to do the jobs of the past but to do the great jobs of the future,” Lutnick said, arguing that fewer people should be aspiring to bachelor’s degrees and should expect to occupy themselves in lower-skill factory work instead. “This is the new model, where you work in these kind of plants for the rest of your life, and your kids work here, and your grandkids work here.”This is the vision for your children’s future that the Trump administration wants to put forward: deprived of material comforts and joy in childhood, then deprived of the hope for upward mobility in adulthood. They want you, and your kids, to be poor, desperate and ignorant. They want you to work in repetitive, dangerous, back-breakingly physical jobs, and they want you to have no aspiration to anything better. They want you to imagine your future, and your children’s futures, not as an open horizon of freedom and potential, but as a dark and desperate struggle, devoid of the notion that we might be anything more than useful instruments for the needs of capital. What do they offer Americans as compensation for this loss? Virtually nothing, aside from misogynist contempt, and the assurance that as our living standards sink and our prospects disappear, in our suffering, at least, we are masculine.On Fox News this past Tuesday, the treasury secretary, Scott Bessent, tried to put this spin on things. Describing what he would say to a little girl who would be denied dolls because of Trump’s tariff policy, Bessent insisted that it was for her own good. “I would tell that young girl that you would have a better life than your parents,” Bessent said. But the Trump administration is doing everything in its power to ensure that America’s children – and in particular, its little girls – have it worse.

      Moira Donegan is a Guardian US columnist More

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      Trade deals, global wars and AI Jedi posts: where is Trump’s focus? – podcast

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      On Thursday, the White House announced a framework for a US-UK trade deal. Earlier in the week, when asked for his take on India’s missile attack on Pakistan, Donald Trump replied: “I get along with both.” But before all of that, on an otherwise quiet Sunday, the US president announced tariffs on foreign films and the reopening of Alcatraz. Throw in the White House posting another AI-generated image of Trump – this time featuring a lightsabre, muscly arms and two bald eagles – and you have one chaotic week.Archive: BBC News, CBS News, ABC News, NBC News, Sky News, Sky News Australia
      Send your questions and feedback to politicsweeklyamerica@theguardian.com

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      Trump tariffs to hit small farms in Maga heartlands hardest, analysis predicts

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      The winners and losers of Trump’s first tariff war strongly suggest that bankruptcies and farm consolidation could surge during his second term, with major corporations best placed to benefit from his polices at the expense of independent farmers.New analysis by the non-profit research advocacy group Food and Water Watch (FWW), shared exclusively with the Guardian, shows that Trump’s first-term tariffs were particularly devastating for farmers in the Maga rural heartlands.Farm bankruptcies surged by 24% from 2018 to 2019 – the highest number in almost a decade – as retaliatory tariffs cost US farmers a staggering $27bn.Numbers of farms fell at the highest rate in two decades with the smallest operations (one to nine acres) hardest hit, declining by 14% between 2017 and 2022. Meanwhile, the number of farms earning $2.5m to $5m more than doubled.Losses from the first-term trade war were mostly concentrated in the midwest due to the region’s focus on export commodities such as corn, soy and livestock that are heavily reliant on China. States with more diverse agricultural sectors such as California and Florida experienced lower rates of insolvency and export declines than in previous years, suggesting the trade war played a role, according to Trump’s Last Tariff Tantrum: A Warning.The breakdown in closures suggests that Trump’s $28bn tariff bailout package in 2018-19 disproportionately benefited mega-farms while smaller-scale farms and minority farmers were left behind.The top tenth of recipients received 54% of all taxpayer bailout funds. The top 1% received on average $183,331 while the bottom 80% got less than $5,000 each, according to previous analysis.The number of Black farmers fell by 8% between 2017 and 2022, while white farmer numbers declined by less than 1%.View image in fullscreen“President Trump’s first-term trade war hurt independent farmers and benefited corporations, offering a warning of what is to come without a plan to help farmers adjust,” said Ben Murray, senior researcher at FWW.“Trump’s latest slap-dash announcements will likely further undermine US farmers while benefiting multinationals who can easily shift production abroad to avoid high tariffs. Farmers’ livelihoods should not be used as a foreign policy bargaining chip. Chaotic tariff tantrums are no way to run US farm policy.”The first 100 days of Trump 2.0 have led to turmoil and uncertainty for consumers, producers and the markets, amid an extraordinary mix of threats, confusing U-turns and retaliatory tariffs from trading partners.Trump’s second trade war could prove even more damaging for US farmers and rural communities, as it comes on top of dismantling of agencies, funds and Biden-era policies to help farmers adapt to climate shocks, tackle racist inequalities and strengthen regional food markets. By the end of April, more than $6bn of promised federal funds had been frozen or terminated, according to the National Sustainable Agriculture Association’s tracker.Rural counties rallied behind Trump in 2024, giving him a majority in all but 11 of the 444 farming-dependent counties, according to analysis by Investigate Midwest.Last week, the agriculture secretary, Brooke Rollins, played down the likely harm to Trump’s farmer base, but said the administration was preparing a contingency bailout plan if farmers are hurt by escalating trade wars. “We are working on that. We are preparing for it. We don’t believe it will be necessary,” Rollins told Fox News. “We are out across the world, right now, opening up new markets.”US farm policy has long incentivized large-scale monocropping of export commodities such as wheat, corn, soy, sorghum, rice, cotton – and industrial animal farming – rather than production for domestic consumption. This globalized agricultural system favors large and corporate-owned operations, while undermining small, diversified farms and regional food systems. It is a system inextricably tied to global commodity markets, and therefore extremely vulnerable to trade wars.The 2018-19 bailout payments were set up in a way that, inadvertently perhaps, “subsidized, encouraged and promoted” the loss of smaller and mid-size farms to the benefit of mega-farms – in large part because the tariffs were implemented without a coherent plan to reform US farm policy and help farmers transition to domestic markets.The number of large farms – those earning more than $500,000 – grew by 18% between 2017 and 2022. “The taxpayers are essentially being asked to subsidize farm consolidation,” the Environmental Working Group said at the time.Trump’s first-term tariffs hit soybean farmers, who are highly dependent on China, hardest, with exports slumping 74% in 2018 from the previous year. The number of soybean farms fell almost 11% between 2017 and 2022 – a significant turn of fortune given the 9% rise over the previous decade. In fact, the only winners after Trump’s trade war were big farms, those harvesting at least 1,000 acres of soybeans, the FWW analysis found.The 2018/19 tariff bailout package was also used to facilitate contracts and commodity purchases. A significant share went to the billion-dollar corporations which already have a stranglehold on the US food system, and rural communities.skip past newsletter promotionafter newsletter promotionArkansas-headquartered Tyson Foods received almost $29m in federal contracts and purchases between August 2018 and July 2019, while Brazil-based JBS secured nearly $78m. JBS used its market power to undercut competition, winning over a quarter of the total $300m in taxpayer dollars allocated towards federal pork purchases, according to FWW.The two multinationals currently control 40% to 50% of the US beef market, 45% of poultry and, along with two other corporations, 70% of the pork market.Things could be even worse under Trump 2.0, with the president no longer seeming concerned by the markets or the polls.John Boyd Jr, a fourth-generation Black farmer, has been unable to secure a farm operating loan since Trump’s tariffs sent commodity prices tumbling. USDA field offices that help farmers apply for credit and government subsidies, which Black, Native and other minority farmers were already disproportionately denied, are being closed in the name of efficiency.View image in fullscreen“This administration is putting the heads of Black farmers on the chopping block and ridiculing us in public with no oversight and no pushback from Congress,” said Boyd, president and founder of the National Black Farmers Association, who farms soy, wheat, corn and beef in Virginia. “Trump’s tariffs are a recipe for complete disaster, and this time his voters in red states will also get punched in the face.”Trump 2.0 tariffs against China are higher and broader, and also target scores of other agricultural trading partners. China is better prepared, having diversified its import markets to Brazil and other Latin American countries since Trump’s first trade war, while US domestic farm policy has barely changed.“The administration seems completely blind to the harm that was done previously, and in many ways what’s happening now is already worse … The concern is that trades are stalled and nothing’s really flowing,” said Ben Lilliston, director of rural strategies and climate change at the Institute for Agriculture and Trade Policy.In late April, China cancelled a 12,000-tonne order of US pork – the largest cancellation since the start of the Covid pandemic, suggesting Trump’s tariff war is already sabotaging trade.“The lesson from last time is we didn’t get the money to the right farmers. But the longer-term lesson is that the US lost credibility in trade. US Secretary Rollins is going overseas to try to open up export markets but they seem to be in deep denial right now about the harm that’s already been done to these relationships,” Lilliston said.A USDA spokesperson said: “President Trump is putting farmers first and will ensure our farmers are treated fairly by our trading partners. The administration has not determined whether a farmer support program will be needed at this time. Should a program need to be implemented in the future, the department’s goal will always be to benefit farms of all sizes.”JBS, Tyson and the American Farm Bureau Federation, a lobby group, have been contacted for comment. More