It’s hard to overstate the impact agriculture has on the State of Nebraska.
The production of crops contributes twenty- five-billion-dollars a year to the state’s economy, according to the University of Nebraska, and the impact extends to the cities, where suppliers, bankers, and consultants make a living providing goods and services to farmers and ranchers.
Few states are as dependent on agriculture as ours, a state that has farming in its title, the “Cornhusker State.” About a third of farm income comes from foreign trade.
But President Donald Trump’s recent calls for new tariffs on Mexico, Canada, and China—the three largest trading partners for the United States—has prompted some chewing of fingernails across farm country.
The last time the current president launched a trade war with China, back in 2017, it caused nearly twenty-six-billion-dollars in agriculture losses nationwide, according to the United States Department of Agriculture’s (USDA) economic researchers.
It prompted Trump to send an extra check to United States soybean producers to cover their losses. But the billions in checks didn’t quite make farmers whole back then, and the Chinese found new outlets for corn, beans, and pork, making them less dependent on what’s grown here.
Recently, the state’s farm leaders told reporters that eight years ago, farmers were in a much better position financially to take a loss. Not so now, they said, with input prices rising and crop prices tanking.
So they’re concerned, because if a trade war erupts, farm goods are typically a prime target.
There was a sigh of relief recently when the president paused, for a month, the planned twenty-five percent tariffs against Canada and Mexico—the nation’s two top trade partners.
But a trade battle is erupting with China. The ten percent tariff ordered by Trump resulted in China retaliating by imposing new tariffs on American goods. They include a new tariff on farm machinery, a sector that employs about 4,900 workers in Nebraska.
Some farm officials here expressed hope that our new president is just threatening tariffs as a negotiating tactic. One stated goal is to get Mexico to get tougher on the flow of black market fentanyl— a dangerous drug— into the country.
Maybe it’s just a threat. Trump did back off on the tariffs against Mexico and Canada after leaders in those countries agreed to take steps to better secure their borders (steps some national media pointed out had already been underway) and after the Wall Street Journal labeled Trump’s tariffs “the dumbest trade war in history.”
But last time, the tough talk on tariffs resulted in real losses for our farmers, who need foreign trade to sustain their operations. Economists predict that a new trade war would increase inflation and cause the loss of thousands of jobs in the United States.
We’ll have to wait and see how this round of tradesmanship plays out.
But Nebraska farmers are pretty clear on one point—they’d rather see increased sales to foreign countries than another “cover your losses” check when a trade war goes south.
Paul Hammel has covered the Nebraska state government and the state for decades. He retired in April as senior contributor with the Nebraska Examiner. He was previously with the Omaha World-Herald, Lincoln Journal Star, and Omaha Sun. A native of Ralston, Nebraska, he loves traveling and writing about the state.
