Trump Tariffs Agriculture: April 2025 Policy Changes & Outlook

Understanding the Tariff Changes Signed By Trump

Overview of Trump’s Tariffs and Their Intended Purpose

Since returning to office on January 20, 2025, President Donald Trump has enacted a series of significant tariffs on several major U.S. trading partners through executive orders issued in recent weeks. These measures are part of a broader strategy aimed at addressing national security concerns, countering what the administration calls unfair trade practices, and incentivizing domestic manufacturing and agriculture.

Current Tariff Structure and Scope (as of April 21, 2025)

On April 2, 2025, President Donald Trump declared a national emergency over the U.S. trade deficit and invoked the International Emergency Economic Powers Act (IEEPA) to impose a 10% tariff on all U.S. imports, effective April 5, 2025. This was followed by higher, individualized reciprocal tariffs targeting countries with the largest U.S. trade deficits, taking effect April 9, 2025.

The new tariffs marked a dramatic escalation: the average effective U.S. tariff rate jumped from 2.5% to an estimated 27%—the highest in over a century.

The trade conflict with China intensified sharply. By April 21, 2025, the U.S. had raised tariffs on Chinese goods to 145%, and China responded with retaliatory tariffs of 125% on U.S. goods. China also imposed non-tariff barriers, such as requiring special export licenses for rare earths and halting exports of these critical materials to the U.S.

Trump’s Liberation Day

On April 2, 2025, President Donald Trump declared “Liberation Day,” marking the implementation of a broad series of tariffs aimed at reshaping U.S. trade policy and boosting domestic industries, including agriculture. During the announcement, Trump emphasized that the measures were designed to protect American farmers from what he described as unfair trade practices, particularly citing Canada for imposing tariffs of up to 300% on certain U.S. agricultural goods.

Trump framed the tariffs as a “Declaration of Economic Independence,” asserting they would reduce reliance on foreign imports and help farmers thrive by securing the domestic market from what he called “dirty and disgusting” foreign agricultural products. He acknowledged the adjustment period might be difficult and asked farmers to bear with him, referencing the previous trade deal with China that promised large agricultural purchases.

While Trump projects optimism, stakeholders across agriculture, manufacturing, and trade are approaching the evolving tariff strategy with caution, especially given the risk of retaliatory actions and continued uncertainty around market access and input costs.

Farmers Caught in the Crossfire

Retaliatory Tariffs and Their Effect on U.S. Agricultural Exports

As of April 2025, the Trump administration’s sweeping tariff policy has imposed a 10% baseline tariff on nearly all imports, including agricultural products—with exemptions for Canada and Mexico. However, retaliatory measures have particularly affected U.S. agricultural exports. China, the largest overseas market for several U.S. crops, enacted retaliatory tariffs ranging from 125% to 135% on goods such as soybeans, sorghum, pork, and dairy. This has effectively closed the Chinese market to American producers, with U.S. soybean and sorghum exports to China falling by over 90% in early 2025.

Export Losses and Market Share Erosion

Other countries, including Canada and the European Union, have also implemented retaliatory tariffs, further shrinking export opportunities and increasing costs for U.S. farmers. Once foreign buyers switch to alternate suppliers—like Brazil and Argentina for soybeans—it becomes difficult for U.S. exporters to regain market share, even if tariffs are later removed. Similar patterns were observed during the previous U.S.-China trade dispute, when U.S. soybean exports to China dropped from $14 billion in 2016 to $3 billion in 2018.

Broader Implications for U.S. Agriculture

Tariff Impact Summary by Region

The consequences have been severe across multiple sectors. Falling crop prices, due to oversupply and reduced international demand, have made profitability harder for farmers. Input costs are also rising sharply, as tariffs on imported fertilizers, pesticides, and machinery—especially from China and Canada—drive up production expenses. U.S. farmers, particularly those in heavily export-dependent states such as Iowa, Illinois, and Kansas, face mounting financial pressure. Some have already turned to government aid programs to stay afloat, while broader uncertainty continues to cloud decisions on planting, investment, and expansion.

Impact on Startups, Large Companies, and Equipment Providers

The ripple effects of Trump’s tariffs extend beyond farmers and directly impact the companies that supply agricultural technology, equipment, and inputs. Increased import costs, supply chain disruptions, and shifting investment trends are forcing businesses in this sector to adapt.

Startups Facing Funding Challenges and Rising Costs

AgTech startups, particularly those in precision agriculture, robotics, and automation, are grappling with increasing manufacturing costs. Many rely on components such as sensors, microchips, and batteries sourced from China, which are now subject to a 10% tariff. This has led to increased production expenses, making it harder for startups to scale and be competitive, especially after the inflationary period the country witnessed since 2021.

Established Companies Adjusting Strategies

Larger firms and agricultural equipment manufacturers are also experiencing significant cost increases due to tariffs on steel, aluminum, and imported machinery components. Some companies have started passing these costs onto farmers, further increasing the financial burden on the industry.

To mitigate these cost pressures, many companies are exploring domestic sourcing for components or considering expanding U.S.-based manufacturing operations. However, these shifts require time and investment, making them challenging short-term solutions.

Equipment and Input Suppliers Struggling with Higher Prices

Tariffs on imports from Canada, Mexico, and China are significantly impacting agricultural input suppliers and, in turn, increasing costs for U.S. farmers. Fertilizers, pesticides, and machinery—critical components of today’s farming—could become even more expensive than they already are due to the new tariffs. The U.S. relies on imports for 90% of its potassium fertilizers, with over 80% coming from Canada, making a 25% tariff on these goods particularly costly. Prices for potash alone could rise by more than $100 per ton according to a study by the University of Illinois, adding financial strain to farmers already facing high operational expenses.

The agricultural machinery sector is also affected, with tariffs on Chinese imports raising manufacturing costs for farm equipment by an estimated 7-8% during previous trade disputes.

Shifting Market Trends: Winners and Losers

While many AgTech startups and suppliers face challenges, some domestic manufacturers could see benefits if tariffs increase demand for U.S.-made agricultural equipment and inputs. However, in the short term, rising costs are expected to squeeze profit margins across the sector, creating financial strain for both producers and buyers.

The long-term outlook remains highly uncertain, not only due to market dynamics and potential policy interventions such as subsidies but also because of the shifting political landscape. With two years until the midterm elections and four years until the end of Trump’s presidency, there is no guarantee that he will maintain his congressional majorities. If the political balance shifts, policies could change significantly—just as they did when Biden took office, reversing many of Trump’s initial trade decisions. This uncertainty complicates long-term investment planning for startups, equipment manufacturers, and suppliers, forcing them to navigate a volatile market.

However, some argue that tariffs serve a broader strategic purpose beyond their short-term economic impact. Austin L. Maness, Chief Operating Officer at Harvest Returns, offers a different perspective:“There is no greater customer than the American consumer. If applying tariffs to imported goods resulted in your own population paying higher prices, then why would other countries enact retaliatory tariffs? Countries use tariffs as an equalizer between each other’s economies. Fortunately, the U.S. has the best consumer and thus the best leverage to use tariffs to lead other countries to do the right thing.”

Would Trump’s Tariff Lead To An AgTech Investment Slowdown?

Investment Trends in AgTech: No Clear Evidence of Decline Due to Tariffs

Historical Growth of AgTech Investment Under Trump’s First Presidency (2016-2020)

Despite concerns over trade uncertainty, there is no clear evidence that tariffs have directly caused a decline in AgTech investment. Historical data from Trump’s first presidency (2016-2020) shows that U.S. AgTech funding steadily increased, rising from $3.2 billion in 2016 to a record $7.9 billion in 2020. This period of growth persisted despite shifting trade policies, indicating that investment decisions in AgTech are driven more by technological advancements, market demand, and broader economic factors rather than tariffs alone.

Potential Investment Opportunities in Automation and Robotics

Some sources suggest that tariffs could create new investment opportunities, particularly for domestic manufacturing, automation, and robotics. Companies like Sabanto see potential to capitalize on shifting market conditions by offering autonomous farming solutions, signaling continued investor interest in certain AgTech sectors.

Skepticism About Tariffs Driving Investment in Controlled Environment Agriculture (CEA)

However, skepticism remains regarding whether tariffs will drive significant investment in controlled environment agriculture (CEA). Austin L. Maness, Chief Operating Officer at Harvest Returns, argues that structural inefficiencies, rather than trade policy, are the primary barrier to growth in CEA:

“No. The lack of investment in CEA is more directly related to its already existing inefficiencies and poor execution on the part of early adopters. Major greenhouse and vertical farming companies have already gone out of business because they just couldn’t ‘produce’ a profitable business model. Investment in CEA will likely come when it absolutely HAS to, not as a way to curb minor and temporary price fluctuations due to the negotiating tactics of politicians.”

Industry Sentiment: Mixed Views on Tariffs’ Long-Term Impact

Recent LinkedIn poll results further highlight the mixed sentiment around tariffs’ long-term impact on agriculture:

• 55% believe tariffs will increase costs for consumers.
• 15% think tariffs could lead to greater investment in greenhouse production.
• 25% expect both higher costs and some investment in CEA.
• 5% believe tariffs will have no major long-term effects.

Trump Tariffs on Agriculture Extend to Horticulture and CEA Inputs

As President Trump’s administration reintroduces tariffs on key imports, their effects on U.S. agriculture are broadening. While most analyses have focused on field crops and ag equipment, the horticulture and controlled environment agriculture (CEA) sectors are also bracing for impact. According to the latest Horti-Gen Insights newsletter, new and proposed tariffs—particularly on imports from Canada and Mexico—pose a direct threat to input availability and pricing.

The Trump tariffs agriculture policy, initially targeting steel, aluminum, and Chinese goods, has now been expanded to include Canadian inputs such as peat moss, fertilizers, and greenhouse structures. These products are critical to the North American greenhouse industry, which relies heavily on cross-border trade.

Impact on Growing Media and Fertilizers

Canada supplies over 80% of peat moss used in the U.S., a foundational material for propagation and plant production. A 25% tariff would significantly increase input costs for growers, potentially pushing them to explore less familiar alternatives like coco coir or wood fiber. The Fertilizer Institute has warned that tariffs on Canadian potash—even after a reduction from 25% to 10%—could still drive substantial price increases.

With the Trump tariffs agriculture strategy extending to inputs vital for both traditional and controlled-environment farms, growers face difficult decisions: absorb higher costs, pass them on to consumers, or reduce usage at the risk of lower yields.

Equipment Tariffs Delay Expansion

Greenhouse operators and CEA companies that rely on Canadian manufacturers for structures and systems are encountering higher capital expenditure. Tariffs on steel and aluminum, implemented on March 13, 2025, affect both raw materials and finished equipment. U.S. manufacturers who depend on Canadian components are also seeing cost hikes, leading to possible project delays or scaled-back modernization efforts.

“This is particularly concerning for vertical farms and greenhouse businesses planning expansion in 2025,” noted one exhibitor at Indoor Ag-Con in Las Vegas. “We’re seeing price volatility not just in inputs, but also in infrastructure.”

Mexican Produce Tariffs Add Further Strain

Beyond Canadian imports, the Trump administration’s renewed scrutiny of trade with Mexico introduces additional risks. Proposed tariffs on tomatoes, peppers, and other produce may reduce availability during off-seasons, leading to higher prices for consumers and strain on food service providers.

Combined with existing tariffs, these measures could create compounding pressure across the fresh produce supply chain. The Trump tariffs agriculture policy is already shaping buyer behavior—consumers may begin prioritizing staple vegetables over ornamental plants and flowers, further impacting the floriculture sector.

Investment and Innovation at a Crossroads

The Trump tariffs agriculture policy has raised operational costs for AgTech companies and input suppliers. Yet, as noted in the broader analysis, not all impacts are negative. Some U.S.-based equipment manufacturers and automation startups see opportunity in the push for domestic production.

Still, uncertainty around trade policy complicates long-term planning. “We’re actively evaluating domestic suppliers, but that shift takes time,” said a representative from a greenhouse automation company. “Tariffs introduce instability just as the sector is trying to scale.”

Industry Sentiment from Indoor Ag-Con

Feedback from the 2025 Indoor Ag-Con in Las Vegas captured this duality: enthusiasm for innovation, tempered by caution about tariffs and global trade. Sessions on supply chain resilience and trade policy drew significant attention, and attendees voiced concern about future pricing, input availability, and investment slowdowns.

Despite the headwinds, exhibitors and growers expressed optimism in their ability to adapt. Networking among domestic manufacturers, policy advocates, and investors was seen as essential for navigating the months ahead.

Conclusion

Trump’s tariffs introduce a complex set of challenges and opportunities for U.S. agriculture and AgTech. In the short term, farmers face higher input costs, supply chain disruptions, and the potential for retaliatory tariffs that could limit access to key export markets. Equipment manufacturers, input suppliers, and startups reliant on imported components are likely to see rising costs, which may strain profitability. While some domestic manufacturers could benefit from increased demand for U.S.-made products, the broader industry remains cautious about the financial burden these tariffs impose.

Looking ahead, the long-term impact of these policies remains uncertain, particularly given the shifting political landscape. With midterm elections in two years and a new presidential election in four, there is no guarantee of policy continuity. This unpredictability complicates investment decisions, especially in areas like controlled environment agriculture (CEA), where existing inefficiencies remain a bigger barrier to growth than trade policy alone. While some investors and companies see opportunities in automation and domestic production, industry sentiment remains mixed. The real test will be whether the U.S. agricultural sector can adapt efficiently enough to offset cost increases, maintain competitiveness, and secure the investment necessary to drive long-term innovation.