How Will Tariffs Impact US Farmers in 2020?

The ongoing and escalating trade war between the United States and China has been taking its toll on the US agricultural industry in recent years. China, which was once a major foreign export market for US farmers, has recently declared that it will no longer be buying US-manufactured agricultural products. This has come as a major blow to US farmers, and many of them have been seriously struggling to make up for the lost profits.

How will US farmers and businesses be impacted by the continuing trade war in 2020? Is now the time to look into additional financing solutions like farm loans? Here’s what you need to know. 

How Tariffs Have Impacted U.S. Farms so Far

In the not-so-distant past, China was one of the largest markets for US agricultural products. Soybeans provide an illustrative example: China is the world’s number one consumer of soybeans, and it’s estimated that in 2018 that country imported roughly 60% of its soybeans from the United States. 

All of that changed in late 2019. Beijing announced that it would be cutting off all of its agricultural imports from the United States in response to tariffs that had been imposed by the Trump administration against Chinese products. 

This has dealt a severe blow to farmers across the United States, particularly in states like Wisconsin, Pennsylvania, and Ohio where agriculture and trade constitute a significant portion of the GDP.

Can Farmers Expect Some Relief in 2020?

The United States Government was quick to respond to the financial losses that were suffered by farmers after China officially withdrew from the market. Shortly after Beijing made its announcement in August 2019, the Trump administration announced that it would be launching a bailout program for the US agricultural industry that would equal roughly $28 billion in total.

While this huge sum of federal money will certainly provide some relief, many farmers perceive it merely as a short-term “Band-Aid” solution to a problem that will continue to harm the industry for years to come. The real solution, these farmers argue, will be to find new export markets to make up for the loss of China.

Is Now the Time to Secure a Farm Loan?

If your farm is struggling financially, now might be a good time to secure a farm land loan. Getting a loan or refinancing your farm could help you obtain immediate access to funds to keep your operations stable until the tariffs are lifted. 

Secure Your Future with a Farm Loan

Whether you’re looking to refinance your farm or expand your current operations, a farm loan can help you get there. Contact one of our loan officers today to learn more about how MSF Agriculture can help your business grow!