Trump’s Farm Bailout Is Expected Soon. What to Know.

Prices of soybeans have fallen. Above, beans await the harvest in Maryland last month. (Jim Watson / AFP / Getty Images)

Key Points

• The administration plans to unveil substantial support for farmers, with a potential package of $10 billion to $14 billion, though funding sources are unclear.
• U.S. farmers face significant challenges due to China’s reduced agricultural purchases.
• USDA forecasts indicate U.S. soybean and corn farmers are expected to lose approximately $100 per acre this year.

American farmers have been struggling as Beijing has slashed purchases of U.S. agricultural products in response to President Donald Trump’s trade war with China, so his administration has promised to help.

Last week, Treasury Secretary Scott Bessent said that on Tuesday, the administration would unveil “substantial support” for farmers, a group that overwhelmingly voted for Trump in 2024. The president promised on social media that he “will never let our farmers down.”.

While The Wall Street Journal said last week that the package could total $10 billion to $14 billion, uncertainties remain. It isn’t clear where the money would come from and how it would be distributed.

How Bad Things Are

Beijing has responded to U.S. tariffs—the average rates is around 55%—with targeted moves. It has imposed a 20% tariff on U.S. soybeans and essentially stopped buying for the 2025 harvest season, turning to Brazil and Argentina instead. Chinese buying of corn, wheat, and sorghum has also sagged, while purchases of pork and cotton continue at reduced levels.

While the U.S. government extended a $20 billion swap line to the Argentine government last month, saying it might purchase the country’s bonds, Argentina has pressed ahead with shipments across the Pacific. Just days after, Argentina dropped its soybean export taxes and sold another 20 shiploads to China.

All that hits the farm belt hard. U.S. soybean prices are falling, and many growers are selling below their cost of production. Some are storing their unsold crops and hoping prices will recover by next spring. But storage space is scarce and expensive.

Banks in rural areas are seeing more requests for loan extensions, demand for loans has jumped, and repayment rates have dropped. Bessent said the administration is working with the Farm Credit Bureau to ensure farmers have access to funds for the next planting season.

It isn‘t just exports that hurt. Tariffs have raised the price of imported farm equipment and parts. And Trump’s crackdown on immigration has made it harder to find farm labor.

“There’s no doubt that the farm economy is in a significant challenge right now, especially our row croppers,” Agriculture Secretary Brooke Rollins said last week. U.S. soybean and corn farmers are both expected to lose roughly $100 per acre this year, according to USDA forecasts.

The Shape of Aid

What an aid package would look like, and where the money would come from, isn’t clear. During the 2018-2019 trade war, Trump funded farm bailouts through the Commodity Credit Corporation, which gives the USDA authority to spend up to $30 billion a year to stabilize farm income.

But much of the CCC money for this year has been used already. That means the administration needs to tap new sources to fund the bailout, and that might require legislation in Congress, where lawmakers are deadlocked over government spending.

While Trump and his Republican allies want to use tariff revenue, essentially recycling money collected from Chinese imports to help farmers, Democrats argue that those funds belong to the general federal budget. They can’t be redirected without Congress’s approval, they say.

There is also uncertainty about how the aid would be delivered. The Market Facilitation Program, which directly pays farmers based on acreage or production levels, is the fastest way to get money into farmers’ hands, but runs the risk of overpaying large farms.

The Section 32 program, on the other hand, allows the USDA to use a share of tariff revenue to buy excess crops and sends them to school lunch or food-aid programs. But there are limits on how much can be used to buy commodities, and the process can be slow.

What Farmers Want

A bailout might only temporarily stop the bleeding. Without China, American farmers will have to seek other buyers, but finding enough demand would be difficult. China has historically imported more than 60% of the world’s soybean supplies.

In an August letter to the White House, the American Soybean Association called on the administration to prioritize an “immediate deal” on soybeans with China.

“U.S. soybean farmers are standing at a trade and financial precipice,” said ASA President Caleb Ragland. “Every day without an agreement further erodes U.S. farmers’ market share in China.”

Trump is expected to meet Chinese President Xi Jinping at the Asia Pacific Economic Cooperation summit at the end of this month. Trump has said on social media that soybeans “will be a major topic of discussion.”

Write to Evie Liu at evie.liu@barrons.com