2025 Agricultural Trade and Tariffs Outlook 

The agricultural trade deficit is forecasted to widen to $49 billion in 2025. How will tariffs impact this?   

The U.S. agricultural trade landscape is facing a year of heightened volatility in 2025. The USDA’s first agricultural trade outlook this year predicts a record trade deficit, with agricultural exports expected to reach $170.5 billion as imports climb to $219.5 billion. Shifting global demand, lower export values for key commodities, and new tariffs under the Trump administration are all contributing factors.  

The combination of rising imports and stagnant exports signals an uphill battle ahead for newly confirmed U.S. trade representative Jamieson Greer. For farmers and agribusiness owners, here is a brief overview of the agricultural trade outlook and dynamics in 2025 that could impact your operation.  

First Quarter Agricultural Trade Outlook in 2025: Key Highlights 

The USDA’s latest trade outlook underscores several key shifts ahead in agricultural trade.  

Exports 

Livestock, poultry, and dairy exports are forecast to rise to $39.7 billion, supported by increasing in U.S. beef and dairy products. Grain and feed exports are expected to reach $37.7 billion, driven by higher corn exports. However, oilseed exports, particularly soybeans, are projected to decline to $32.4 billion due to reduced demand from China and strong competition from Brazil and Argentina. U.S. cotton exports are also down to $4.1 billion due to lower volumes.  

Imports 

 Agricultural imports are set to increase to $219.5 billion, $13 billion higher than last year’s record and $4 billion higher than November’s 2025 agricultural trade outlook. This increase is reflected mostly in higher demand for horticultural products, coffee, and processed foods. Rising consumer preference for fresh produce, nuts, and specialty food products continues to drive import growth, particularly from Latin America and Europe. 

Trading Partners 

While exports to Mexico are on the rise, shipments to China and Canada—the other two leading agricultural export markets—are in decline. Lower-than-expected sales of baked and prepared goods, corn, feed, and distiller grains are to blame for the decline in exports to Canada, while competition from South American grain along with increased self-sufficiency efforts are contributing to the decline of U.S. imports to China. Meanwhile, opportunities for expanded exports to Southeast Asia and the Middle East may provide new avenues for U.S. farmers. Countries like Indonesia and Vietnam are showing increased demand for U.S. wheat and dairy products, while Middle Eastern markets are importing more beef and poultry. The European Union export forecast is also up slightly due to strong sales of distilled spirits and tree nuts. 

The Tariff Effect on Agricultural Trade 

We would be remiss not to address one looming factor that has already begun to impact the U.S. agricultural trade outlook—tariffs. Events are unfolding quickly, but at the time of this writing, here’s a short timeline of what’s officially happened so far: 

• February 1, 2025: An executive order is released that announces a 25 percent tariff on all imports from Mexico and Canada, along with a 10 percent tariff on all imports from China.  

• February 3, 2025: One day before going into effect, President Trump agrees to delay the 25 percent tariff on all imports from Mexico and Canada tariffs for 30 days, following discussions on border security and drug trafficking enforcement.  

• February 10, 2025: President Trump announces 25 percent tariffs on global steel and aluminum imports, effective March 12, 2025, removing previous exemptions.  

• February 13, 2025: The administration orders a review of reciprocal tariffs, examining trade balances and foreign tariffs, with a report due in 180 days. 

• March 3, 2025: Trump confirms that 25 percent tariffs on Mexican and Canadian imports will take effect on March 4, citing border security and trade imbalances. The 10 percent tariff on Chinese imports is raised to 20 percent.  

• March 4, 2025: In response to the new U.S. tariffs, China announces that it will impose additional tariffs on key U.S. agricultural products. Starting March 10, an additional 15 percent tariff will be imposed on imported chicken, wheat, corn, and cotton. Sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products will be subject to an additional 10 percent tariff. President Trump also announces the U.S. will impose reciprocal tariffs starting on April 2, 2025. 

These policies have sparked concerns over retaliatory measures. Canada, Mexico, and China are all critical markets for U.S. agriculture, accounting for nearly 37 percent of total U.S. agricultural exports. Higher tariffs could lead to decreased demand and loss of global market share for American farm products.  

It could also increase input costs for farmers relying on imported goods, such as fertilizers, machinery, and chemicals. Tariffs on imports from Canada and Mexico may increase prices on critical farm supplies such as potash-based fertilizers, while higher levies on Chinese goods could drive up the cost of agricultural equipment, pesticides, and animal feed ingredients. 

 In addition, as both consumers and producers, farmers may feel the impacts of higher grocery store costs if these prices are passed to the consumer as most Americans expect.  

This combination will likely put pressure on farm margins this year, making cost management an essential strategy for producers in 2025. 

Minimizing the Impact of Agricultural Trade Risk 

With trade dynamics shifting, there are several strategies farmers and agribusiness owners can implement now to mitigate agricultural trade risk.  

Market Diversification 

Expand exports to alternative markets beyond China, Canada, and Mexico, such as Southeast Asia, Europe, and the Middle East, where demand for U.S. agricultural products is growing. Shifting focus to domestic markets could also benefit U.S. operators who were previously priced out by lower import costs. 

Cost Management 

Stress test increases in input costs due to tariffs and adjust your financial strategy accordingly. Explore bulk purchasing, strategic supplier partnerships, and cost-cutting measures to help ease financial strain. 

Supply Chain Resilience 

Strengthen relationships with domestic suppliers and explore alternative sourcing options to reduce dependency on imported goods. Invest in localized supply chains to insulate your operation from trade-related disruptions. 

Advocacy and Engagement 

Stay updated on trade policy changes and new federal support programs as they emerge. While temporary relief through the Commodity Credit Corporation is under consideration for farmers affected by tariffs, no official announcement has been made yet. Stay engaged with industry organizations and make your voice heard to ensure the agricultural sector’s concerns are included in policy discussions. 

Supporting American Agriculture Through Thick and Thin 

The 2025 agricultural trade outlook presents both challenges and opportunities. While operations that rely more heavily on export trade will be more directly impacted, secondary impacts of higher input costs could trickle down to other producers as well. The silver lining involves the opportunity within the domestic market, as tariffs could level the playing field and increase the competitive advantage of domestic producers. Either way, farmers who proactively manage costs and explore new markets will be better positioned for success.   

At AgAmerica, we remain committed to providing financial solutions and resources that empower farmers to withstand market fluctuations. Explore more updates on the AgAmerica trade and legislative resource page.