Exploring the Upside of the Trade War: Could the Tariff Strategy Pay Off for American Farmers?
Part 1 of our 2-Part Series on the Future of American Farming in the Tariff War
As trade tensions continue to rise between the United States and key global partners like China, Canada, and Mexico, American farmers find themselves at the center of an intense economic confrontation. Tariffs on both imports and exports are reshaping everything from fertilizer costs to crop pricing and market access.
But what if the U.S. strategy works? What if these tariffs successfully pressure foreign governments to lower their own trade barriers and open their markets to more American goods?
If tariffs do what they’re intended to do, one of the first places we’d see movement is on the export front. For U.S. producers, that could mean old markets reopening and new ones emerging, a shift that might quickly change the tone around pricing and demand.
Here’s what a “win” in the tariff war could mean for the future of American agriculture:
Reopened and Expanded Export Markets
Winning the tariff war would likely mean that countries like China, Mexico, and Canada agree to reduce or remove their tariffs on American agricultural products. That would immediately make U.S. exports more affordable and competitive, helping to:
- Restore lost demand for soybeans, pork, corn, wheat, and poultry.
- Reclaim market share from Brazil, Argentina, and other global players.
- Promote long-term purchase agreements, stabilizing commodity market.
And when those markets open back up, the ripple effects don’t stop at the farm gate. For U.S. farmers, this could mean higher prices, stronger margins, and more predictable income.
Stronger prices tend to trickle down into everything, from equipment purchases to hiring decisions, breathing new energy into rural communities that rely on ag to keep things moving.
Rising Farm Incomes and Rural Investment
More open markets often translate into stronger farmgate prices. With more buyers competing for U.S. crops and products, prices could rise, allowing farmers to:
- Pay down debt or reinvest in equipment, land, or technology.
- Increase land values, strengthening financial statements and aiding rural financing.
- Hire more labor and expand operations, benefitting entire rural communities.
But short-term gains are only part of the story. If the U.S. gains leverage, it could open the door to more practical, wide-reaching trade deals, and reduce our reliance on a few unstable partners.
Long-Term Trade Agreements and Global Leverage
A tariff war victory could give the U.S. leverage to negotiate stronger trade agreements with countries beyond its current top partners, diversifying our export base and reducing future vulnerability.
New or improved deals could emerge with:
- Southeast Asia (Vietnam, Indonesia, Philippines)
- Africa (emerging middle classes and urbanization)
- The UK and India (key growth markets with growing demand for protein and grain)
Beyond export markets, this moment might be a chance to focus more seriously on rebuilding the systems at home. If tariffs do bring production back, it could steady supply chains and support ag infrastructure where it’s needed most.
Investment in Domestic Infrastructure and Production
If tariffs successfully lead to reshoring ag-related manufacturing, including fertilizer, farm inputs, equipment, and food processing, American agriculture could become more self-reliant and resilient in the long term.
- Fertilizer prices could stabilize if domestic supply increases.
- Equipment delays and input bottlenecks could ease with local sourcing.
- Rural job creation could follow new processing plants, co-ops, or logistics hubs.
All of these changes point to more than just a rebound, they suggest the chance to build a stronger, more independent ag economy. It’s not just about winning today; it’s about shaping how we move forward for the long haul.
A Stronger Position for the Future
Winning the tariff war wouldn’t just be an economic victory, it would strategically reposition the American ag industry. The U.S. could emerge with:
- More secure access to global food markets
- Stronger national control over critical ag inputs
- A more diverse and modern farm economy
That’s the upside. But as anyone in ag knows, things rarely play out exactly as expected. We will look at what happens if these policies fall short — and what that might mean for farmers caught in the middle.
But the Road Isn’t Risk-Free
There’s no doubt that if the U.S. gets what it’s aiming for, farmers could benefit from stronger markets, better prices, and more leverage on the global stage. But no one in agriculture plans for just one outcome. The same policies that might unlock opportunity could also create real pain if they don’t land the way policymakers intend.
That’s why it’s important to look at both sides of this story. Because while the potential upside is clear, the risks, higher input costs, prolonged market instability, and weakened trade relationships are very real, too.
In Part 2 of this series, we’ll dig into what happens if the current strategy doesn’t go to plan. How vulnerable are U.S. producers in the long run? What happens if key markets don’t come back? And what can growers and ag lenders do to stay prepared if things shift in the wrong direction? What is the worst-case scenario for U.S. agriculture if the tariff war backfires?
Stick with us. The next part of the story matters just as much. Read Part 2: What if the U.S. Loses the Trade War?
Markets shift. Planning shouldn’t wait. If tariffs go your way, how will you put that momentum to work? And if they don’t, what’s your backup plan? Talk it through with a lender who understands agriculture with a perspective to help you stay flexible—like the team at Conterra.
The Farming America Blog can be found on the Conterra Ag website: conterraag.com/farming-america-blog/
Conterra is dedicated to financing American agriculture, offering specialized agricultural loans tailored to meet the specific needs of farmers and ranchers nationwide. With a team of experienced relationship managers strategically located across the country, we provide regional expertise and personalized service to our clients. Whether you’re a seasoned producer or new to the industry, Conterra is committed to supporting your agricultural endeavors. Our people, products, and process-driven approach to lending makes us unique.
Disclaimer: Please note that the information provided in this article is for educational and informational purposes only, and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.
