Trump Agriculture Policy: Tariffs, Direct Payments, and Farm Bill

Trump administration agriculture policy in the second term has centered on four moves: over $30 billion in direct payments to farmers, tariffs that triggered heavy retaliation and export losses, a July 2025 tax and safety-net law that made key farm provisions permanent, and deep cuts to USDA staffing and programs. A Supreme Court ruling in February 2026 forced the administration to abandon one of its main tariff tools, and a new farm bill has cleared the House but not the Senate.

Direct Payments to Farmers

Two large ad hoc aid programs have defined the administration’s response to farm-economy stress.

The Emergency Commodity Assistance Program, authorized by the American Relief Act of 2025 and funded at up to $10 billion, delivered one-time per-acre payments for 22 row crop commodities for the 2024 crop year. Upland cotton received about $84.74 per acre, corn about $42.91, wheat about $30.69, and soybeans about $29.76.¹ Payments went out at 85 percent of the calculated rate, then a further disbursement brought the total factor to 99 percent.² USDA reports $9.3 billion distributed to more than 560,000 farmers.³

On December 8, 2025, USDA announced another $12 billion in one-time “bridge payments.” Of that, $11 billion went to row crop producers through the Farmer Bridge Assistance Program, with $1 billion reserved for specialty crops and sugar. Rice received the highest rate at $132.89 per acre, followed by cotton at $117.35, corn at $44.36, wheat at $39.35, and soybeans at $30.88. Producers with adjusted gross income above $900,000 were ineligible, and individual payments were capped at $155,000. Crop insurance was not required.⁴ USDA framed the bridge payments as a temporary measure until provisions in the One Big Beautiful Bill Act take effect for the 2026 crop year.³

The distribution of these payments has drawn scrutiny. The Environmental Working Group’s analysis found that since 2018, 2,191 large farm operations have each collected more than $1 million in cumulative bailout payments, while nearly 400,000 farmers received less than $10,000 during the previous trade-war round.⁵ The Cato Institute’s Tad DeHaven called the bailouts an attempt to fix problems created by the administration’s own “pointless trade war” and “tariff fetish.”⁶

Tariffs and What They Cost U.S. Agriculture

On April 2, 2025, the administration imposed a 10 percent baseline tariff on imports from nearly all countries, along with higher “reciprocal” tariffs on selected nations, using the International Emergency Economic Powers Act as legal authority.⁷ China retaliated, and U.S. agricultural exports took the largest hit.

U.S. soybean shipments to China fell from over 26 million metric tons in 2024 to 7.4 million metric tons in 2025, a decline of more than 72 percent. Total U.S. agricultural exports to China dropped by $16 billion in 2025. Canada saw a $1.3 billion decline in U.S. agricultural imports, including a 78 percent collapse in American wine exports.⁷ A study covering March 2025 through February 2026 estimated Chinese retaliatory tariffs alone cost U.S. agricultural exporters $14.9 billion, roughly 41 percent higher than annualized losses during the 2018–2019 trade war. Soybeans accounted for about $6.8 billion, with beef, cotton, and tree nuts each adding over $900 million.⁸

Brazil has taken market share as a result. A decade ago the United States and Brazil each supplied about 40 percent of China’s soybean imports. In the first five months of 2026, Brazil held 60 percent, the U.S. 23 percent, and Argentina 10 percent.⁹

The Supreme Court Ruling on IEEPA Tariffs

On February 20, 2026, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that IEEPA does not authorize the president to impose tariffs. Chief Justice John Roberts wrote the majority opinion, holding that the power to lay and collect duties belongs to Congress under Article I and that IEEPA’s authority to “regulate” importation does not encompass taxation. Justices Thomas, Alito, and Kavanaugh dissented.¹⁰ Customs and Border Protection halted collection of IEEPA-based tariffs at midnight on February 24, 2026.¹¹

The ruling did not end the broader tariff program. The administration invoked Section 122 of the Trade Act of 1974 to impose a 10 percent ad valorem duty and launched Section 301 investigations against 16 economies in March 2026.⁷ Tariffs imposed under other authorities, including Section 301 actions against China and Section 232 tariffs on steel and aluminum, were unaffected.¹¹

Trade Deals and Market Recovery

The administration has pursued trade frameworks with more than 15 countries, including Japan, Mexico, the United Kingdom, and the European Union.¹² An October 2025 agreement committed China to purchase at least 25 million metric tons of U.S. soybeans annually for three years. A May 2026 summit between Trump and Xi Jinping added a further commitment of at least $17 billion in annual U.S. agricultural purchases through 2028. As of mid-June 2026, China had completed 12 million metric tons of purchases toward the current marketing year.⁹

USDA also announced a $285 million America First Trade Promotion Program in September 2025, funding 55 nonprofit organizations and cooperatives for export market development.¹³

The One Big Beautiful Bill Act

Signed on July 4, 2025, this law made permanent several tax and safety-net provisions farm groups had prioritized. Statutory reference prices for Price Loss Coverage and Agriculture Risk Coverage rose 10 to 21 percent for major commodities including corn, soybeans, and wheat, effective for the 2026 crop year. The bill also allocated $34 billion over ten years for conservation programs including EQIP, CSP, and ACEP.³

On taxes, the estate tax exemption was made permanent at $15 million per individual, or $30 million per couple, indexed for inflation. Without action, the exemption was scheduled to revert to $5.5 million, which farm organizations warned would force many land-rich, cash-poor family operations to sell assets to cover estate taxes.¹⁴ The bill made permanent the qualified business income deduction (increased to 23 percent), provided 100 percent bonus depreciation for farm equipment and structures, and included the Access to Credit for our Rural Economy Act to lower agricultural real estate loan interest rates. The package is projected to lower farmer taxes by more than $10 billion.¹⁵

The Environmental Working Group estimated that fewer than 6,000 farms would see annual increases above $5,000 from the guaranteed payment provisions and argued the bill created loopholes enabling corporate farms to collect effectively unlimited subsidies.⁵

Where the Farm Bill Stands

The 2018 Farm Bill (the Agriculture Improvement Act of 2018) was extended through September 30, 2026, at existing funding levels.¹⁶ The House Agriculture Committee approved a new bill, the Farm, Food, and National Security Act of 2026 (H.R. 7567), on March 5, 2026, by a vote of 34 to 17, and the full House passed it on April 30, 2026, by 224 to 200.¹⁷ The bill spans all 12 traditional titles and would reauthorize programs through fiscal year 2031. Key provisions include reauthorizing the Conservation Reserve Program at 27 million acres, transferring Food for Peace Act responsibilities from USAID to USDA, extending SNAP through 2031, and creating new programs for specialty crops and hemp. As of mid-2026, the Senate Agriculture Committee has not marked up its own version, so the bill has not reached the president’s desk.¹⁸

The H-2A Wage Rule

In August 2025, USDA discontinued the Farm Labor Survey that had long been the basis for setting the Adverse Effect Wage Rate, the minimum wage required for H-2A temporary agricultural workers. In October 2025, the Department of Labor issued an interim final rule replacing the survey with the Bureau of Labor Statistics’ Occupational Employment and Wages Statistics data and creating a two-tiered wage structure. DOL estimated that 92 percent of H-2A workers would fall into the lower “Skill Level I” tier, set at the 17th percentile of surveyed wages. The rule also permits employers to deduct housing costs from workers’ pay, potentially up to 30 percent of their hourly rate.¹⁹

The Economic Policy Institute estimated the rule would reduce wages for all farmworkers by $4.4 billion to $5.4 billion annually.¹⁹ The administration cited “initial savings of at least $2 billion” for farm employers.³ Attorneys general from 18 states filed a formal comment opposing the rule, arguing that DOL bypassed the required notice-and-comment process under the Administrative Procedure Act and that the new methodology would transfer $2.46 billion annually from workers to employers.²⁰

Nutrition Policy, SNAP, and Farm Markets

The “Make America Healthy Again” executive order signed February 13, 2025, launched changes to federal nutrition policy with direct implications for what farmers grow and what federal food programs buy.

On January 7, 2026, HHS Secretary Robert F. Kennedy Jr. and Agriculture Secretary Brooke Rollins released the Dietary Guidelines for Americans, 2025–2030. The guidelines prioritize protein (including red meat, eggs, and seafood), full-fat dairy, vegetables, fruits, healthy fats, and whole grains, while calling for a “dramatic” reduction in highly processed foods, refined carbohydrates, and artificial additives. The guidelines state that “no amount of added sugars or non-nutritive sweeteners is recommended.”²¹ Guidance was also issued allowing whole milk back into school menus, and a voluntary “Product of USA” label was introduced.²²

USDA has approved SNAP food restriction waivers permitting states to prohibit purchases of items such as soda, candy, and energy drinks with SNAP benefits. As of mid-2026, 18 states had received approvals across three waves, with a later USDA tally listing 24 states.²³²⁴ USDA has also authorized $970 million in Section 32 purchases of U.S.-grown fruits, vegetables, nuts, and beans for distribution to food banks.²² Separately, USDA directed states to enforce existing work requirements for able-bodied adults without dependents receiving SNAP.²⁵

USDA Budget and Staffing Cuts

The fiscal year 2026 USDA discretionary budget request came in at $23 billion, roughly $6.7 billion (about 23 percent) below the prior year.²⁶ The fiscal year 2027 proposal went further, requesting $20.8 billion, a 19 percent decline from 2026, and included $50 million for USDA reorganization and staff reductions.²⁷

The agencies farmers deal with directly are the ones losing staff. Farm Service Agency positions are targeted to drop from 8,135 full-time positions in fiscal 2025 to 6,009 by 2027, more than a 25 percent reduction. Program eliminations proposed include Food for Peace (from $1.2 billion to $97 million for closure), the McGovern-Dole Food for Education Program at $240 million, and zeroing out discretionary funding for Conservation Technical Assistance.²⁷ The Natural Resources Conservation Service has already lost more than 2,300 positions since fiscal 2025, and over 500 producers signed a letter to Congress warning that proposed cuts would leave nearly every state with fewer than 10 NRCS employees.²⁸

Rollins has defended the reductions as efficiencies enabled by technology modernization, pointing to a “one farmer, one file” digital initiative.²⁹ At an April 2026 House Appropriations Committee hearing, members of both parties said the cuts would cause “real harm” to farmers who depend on local office services.²⁸

How Farmers Are Faring

Despite record levels of government aid, farm bankruptcies rose in the first two quarters of 2025, reaching a five-year high for small agricultural businesses by mid-2025.³⁰ Production costs remain high: labor is up 47 percent, fertilizer up 37 percent, fuel and oil up 32 percent, and seed up 18 percent since 2020. Corn prices fell to $4 per bushel in 2025 from $7 in 2022. Younger and newer farmers with less equity have been identified as the most vulnerable.³¹

Christopher Wolf of Cornell University said tariff uncertainty is “tough for farmers” and that supply chain disruptions may have lasting effects as Chinese buyers build relationships with Brazilian and Argentine suppliers. Michael Langemeier of Purdue University acknowledged the strategy could eventually work but said “changing the goalposts” on trade was damaging. The American Soybean Association’s president said soybean farmers are at a “trade and financial precipice.”³⁰

Texas Agriculture Commissioner Sid Miller praised the agenda: “We finally have an administration that is prioritizing farmers and ranchers.”³⁰

1
farmdoc daily. The 2025 Emergency Commodity Assistance Program
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USDA Farm Service Agency. Emergency Commodity Assistance Program
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USDA. Trump Administration Announces $12 Billion Farmer Bridge Payments
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American Farm Bureau Federation. Farmer Bridge Assistance Program Details on $11 Billion in Aid
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Environmental Working Group. Bridge to Nowhere: Trump Bailout Again Flows to Largest, Wealthiest Farms
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Cato Institute. Trump’s Farm Bailout Adding Insult to Injury for American Taxpayers
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American Enterprise Institute. Evaluating the Impact of Tariffs on U.S. Agriculture a Year After Liberation Day
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Farm Policy News. China’s Retaliatory Tariffs Cost U.S. Ag Exporters $15 Billion, Study Says
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CNBC. U.S. Fights With Brazil for China’s Giant Soybean Market
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SCOTUSblog. Learning Resources, Inc. v. Trump
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WilmerHale. United States Terminates IEEPA-Based Tariffs Following Supreme Court Decision
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Farm Progress. Will Rollins’ 5 Priorities Strengthen the Ag Economy
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USDA Foreign Agricultural Service. Announcing Awardees of the America First Trade Promotion Program
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American Farm Bureau Federation. One Big Beautiful Bill Act Final Agricultural Provisions
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U.S. House Ways and Means Committee. The One Big Beautiful Bill Delivers for America’s Family Farmers and Ranchers
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USDA. Farm Bill
17
Congress.gov. H.R. 7567 – Farm, Food, and National Security Act of 2026
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Congressional Research Service. Farm, Food, and National Security Act of 2026
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Economic Policy Institute. Trump’s New H-2A Wage Rule Will Radically Cut the Wages of All Farmworkers
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Oregon Department of Justice. AG Rayfield Opposes Trump’s New Rule Cutting Wages for Temporary Farmworkers
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HHS. Fact Sheet: Historic Reset of Federal Nutrition Policy
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USDA. Make America Healthy Again
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ABC News. 6 States Approved Waivers to Remove Unhealthy Foods From SNAP
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USDA Food and Nutrition Service. SNAP Food Restriction Waivers
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USDA. USDA Reiterates Importance: Those Who Can Work Should Work While Receiving SNAP
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USDA. 2026 USDA Budget Summary
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DTN/Progressive Farmer. USDA Budget Proposal Signals Shift
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Brownfield Ag News. Proposed USDA Staffing Cuts Questioned as Lawmakers Warn of Impact on Farmers
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USDA. Secretary Brooke Rollins Takes Bold Action in First 30 Days at USDA
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BBC. Farmers and Trump’s Trade War
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WPR. Farmers Trump Trade War Bailout Harvest