CHOICES
A publication of AAEA
In the spring and summer of 2025, President Trump unilaterally imposed a slate of new tariffs on numerous countries (Pettypiece, 2025). These tariff unveilings caused significant disruptions in global trade. While President Trump was able to negotiate “favorable” trade agreements for the United States with some countries (the European Union, Indonesia, Japan, Pakistan, the Philippines, South Korea, the United Kingdom, and Vietnam), negotiations with other major economies (Brazil, Canada, China, Mexico, and India) have stalled or are still ongoing as of mid-October 2025.
I briefly review US tariff policies that have been negotiated with or imposed on major economies. See Ridley and Devadoss (2026); Grant, Arita, and Karagulle (2025); and Zurita and Steinbach (2025) for US trade agreements with other countries.
Starting from the “Liberation Day” tariff announcements, the European Union and the United States threatened each other with back-and-forth retaliatory tariffs. But both countries reached a trade agreement on July 27, 2025. As part of the deal, the United States will roll back the threatened 30% tariff to a 15% tariff on almost all goods coming from the European Union. However, this deal appears to be one-sided, as the European Union agreed to eliminate tariffs on most goods and agricultural products (nuts, dairy products, and fresh and processed fruit and vegetables) and required Europe to invest $600 billion in the United States and purchase US oil, gas, and nuclear fuel worth $750 billion to get the tariff reduction (Reuters, 2025a). Yet according to the European Union, these commitments are nonbinding and not concrete (Malmström, 2025). Regardless of the specifics, with the highest tariffs since the 1950s, President Trump 2.0 marks a major backslide in trade relations with the largest US trading entity (Malmström,2025). Since this agreement must be approved by all member states and the EU parliament, it is not a done deal yet.
The United States and Canada had announced back-and-forth retaliatory tariffs following the Trump administration’s announcement of tariffs on most Canadian imports in early February 2025. While around 85% of US–Canada trade remains tariff-free under USMCA, the United States imposed tariffs of 25% on steel, aluminum, and automotive imports in early April, which later increased to 50% (Shepardson, 2025), while Canada retaliated with tariffs on US goods. As of October 2025, no trade deal has been reached between these two neighbors, and the existing tariffs remain. On October 25, 2025, Trump threatened to increase the tariff on Canada by an additional 10% because of an antitariff television commercial by the Ontario province (Associated Press, 2025).
On March 4, 2025, the 25% US tariff on non-USMCA-compliant products took effect. The Fair and Reciprocal Trade Order, issued on April 2, did not have a major impact on Mexico, as the 25% tariffs were already in place, and exemptions for USMCA-compliant imports remained. To pressure Mexico into making a trade deal, President Trump announced an increase in the tariff to 30% if an agreement was not reached by the end of October. A 90-day extension avoided this tariff increase, but as of mid-August, no deal has been reached.
Between early February and early April 2025, the US–China trade war peaked with the US imposing large tariffs of 145% on goods coming from China and China retaliating with tariffs of 125% on US goods (Tang, 2025). Then, on May 12, the United States and China reached a 90-day truce, with US tariffs on Chinese goods falling to 30% and Chinese tariffs on US goods declining to 10%. Then, on June 11, following a meeting between the two countries’ officials, a trade truce was extended until November 10 (Reuters, 2025b). At the meetings between President Trump and Chinese President Xi Jinping on October 29, 2025, an agreement was reached to lower the total effective US tariff on Chinese imports from 57% to 47%, for China not to restrict rare earth mineral exports, and for China to buy 25 million metric tons of US soybeans over 3 years (Aggarwal, Ganglani, and Guo, 2025).
The “Liberation Day” tariff announcement included a 10% tariff on all Brazilian goods entering the United States. However, on August 1, the tariffs were increased to 50% due to President Trump’s opposition to the judicial actions against Brazil’s former president, Jair Bolsonaro (Singh and Brito, 2025). No agreement has been reached as of mid-September 2025, and the 50% tariffs remain in place.
The United States imposed a baseline “reciprocal tariff” of 27% on Indian goods on April 2, 2025 (Brownstein, 2025). Since this tariff announcement, several rounds of negotiations have taken place between the United States and India, with no resolution. Indian tariffs on agricultural and dairy products are a sticking point in reaching any negotiated settlement. In July, this baseline tariff was changed to 25% (Brownstein, 2025), and the Trump administration further placed an additional 25% tariff because of India’s continued purchase of Russian oil, for a total tariff rate of 50% on Indian goods (Reuters, 2025c; 2025d). Because of this escalating US tariff, negotiations broke down, and no agreement has been reached by the end of October 2025.
President Trump's negotiated trade framework with some countries, higher tariffs on other countries, and retaliatory tariffs by certain countries will have significant impacts on the world agricultural commodity trade. The articles in this theme
examined the implications of these policies for some US farm sectors.
Ridley and Devadoss (2026) note that the Trump administration’s whirlwind of new tariffs will likely have ramifications for US agriculture, particularly for row crops, which reached $60 billion worth of exports in 2023. Their article surveys the implications of current trade disputes, the resulting retaliatory responses, and ongoing trade negotiations for US row crop exports. This study concludes that coercion and threats to achieve trade policy goals can make the United States an unreliable trade partner, as evident from the import diversion by China after the first US–China trade war.
Liu, Gopinath, and Robinson (2025) investigate the impacts of the US–China trade conflicts on the US cotton sector and the global cotton supply chain. Chinese tariffs adversely affect the competitiveness of US cotton in the Chinese market, which will cause US cotton exports to be diverted to other countries and helps Brazil to expand its cotton market share in China. Meanwhile, US tariffs on Chinese textile and apparel products disrupt the global cotton supply chains and trade flows. These policies can lead to short- and long-term challenges for the US cotton sector, including significant competitive pressures from other exporters and difficulties in the US recapturing global cotton market share. To overcome these problems, the US cotton sector needs to lower production costs, improve operational efficiency, diversify export markets, and implement strategic marketing approaches.
Muhammad, Martinez, and Wyatt (2025) summarizes recent trends in US beef production and trade. They discuss how the US beef sector has adapted to changing global consumption patterns and domestic supply constraints. In addition, the authors evaluate the impact of recent US tariffs and trade policies on US beef imports from key exporters: Canada, Mexico, and Brazil. They also explore the effects of current trade policies on US beef exports, particularly how major beef-producing countries (such as Brazil) have increased their global market share at the expense of US beef exports.
He, Naing, and Devadoss (2025) examine the structural drivers behind US reliance on Mexican fresh vegetable imports, review US fresh vegetable trade patterns, and simulate the impacts of a hypothetical US tariff of 25% on fresh vegetable imports from Mexico and a 17% tariff on Mexican fresh tomatoes. Since Mexico supplies about 71% of US fresh vegetable imports, valued at $9.4 billion in 2024, these policies have significant implications for the US fresh vegetable sector. This study finds that a 25% tariff on Mexican fresh vegetables decreases imports by 29%–67% depending on the vegetable, which increases the price to consumers already burdened with high food price inflation. This study also discusses the potential implications of reduced fresh vegetable imports on employment and prices along the US fresh vegetable supply chain.
Glauber, Piñeiro, and Gianatiempo (2025) examine the effects of current US tariff policies on trade flows, particularly Latin America and the Caribbean countries’ agricultural imports and exports. They find that the impact of US tariffs on US imports from these countries will depend on the relative magnitude of tariffs compared to other suppliers, such as Mexico. The LAC countries would likely gain from any trade war between the United States and China, particularly for oilseeds, grains, and meats.
Many in the Trump administration say that exporters will pay for the import tariff. Standard graphical analysis in any undergraduate trade textbooks shows that tariffs levied by a large country, such as the United States, are paid by both importers and exporters (Reed, 2001). Part of the US tariffs will be paid by US importers, which will raise the price for US consumers. The exporters will receive a lower price due to the US tariffs. Therefore, US tariffs hurt US consumers due to higher prices paid by them and exporters in the foreign country because of lower prices received by them. Thus, it is not correct to say that tariffs are not paid by US consumers but are paid by foreigners. Ultimately, a portion of tariffs is effectively a disguised tax on American consumers. Furthermore, these tariffs add inflationary pressure and harm consumers who are already saddled with high prices, which is consistent with the findings by McKibbin et al. (2025), Zahn (2025), and several studies on this theme.
President Trump’s 2.0 tariff policies generated $167 billion in tariff revenues through the end of November 2025 (Jacobson, 2025). However, it is worth emphasizing that these tariff revenues are collected from US importers, not from exporters. US importers transmit this tariff to consumers in the form of higher prices. Therefore, these revenues are taxes collected from US consumers. In general, grocery bills are a large share of the budget for poor US consumers, and higher grocery prices, because of President Trump’s tariff policy, are a bigger drain on the poor than on the rich.
Because of the US–China trade war, the first Trump administration provided subsidies to farmers through the market facilitation program. The US Agriculture Secretary, Brooke Rollins, indicated that the farm sector is not doing well because many importing countries are not buying US commodities (Fields, 2025). The US government is providing a $12 billion bailout to farmers, with $11 billion going to row crop farmers (Kopack and Gutierrez, 2025). These subsidies further perpetuate inefficiencies, and farmers would rather earn profits by selling their commodities in the market. Free trade policies do not require subsidy payments to compensate for the problems caused by tariff policies and are also the most efficient.
Aggarwal, M., J. Ganglani, and P. Guo. 2025, October 30. “What Trump and Xi Did and Did Not Agree Upon in Their Meeting.” NBC News. Available online: https://www.nbcnews.com/world/asia/trump-xi-meeting-fentanyl-tariffs-rare-earths-china-rcna240710
Associated Press. 2025, October 25. “Trump Threatens Canada with 10% Extra Import Tax for Not Pulling Down Anti-Tariffs Ad Sooner.” Available online: https://apnews.com/article/trump-canada-tariffs-3cbc1cbf9ed53a10b442fd55dae1e0a3
Bown, C. 2025, July 20. “Trump's Trade War Timeline 2.0: An up-to-Date Guide.” Available online: https://fortune.com/asia/2025/07/04/brics-summit-rio-brazil-tariffs-china-russia/
Brownstein. 2025, August 8. “President Trump Increases Tariffs on India.” Brownstein Client Alert. Available online: https://www.bhfs.com/insight/president-trump-increases-tariffs-on-india/
Fields, A. 2025, September 30. “Trump’s Agriculture Secretary: ‘The Farm Economy Is Not in a Good Place.’” The Hill. Available online: https://thehill.com/homenews/administration/5529618-trump-administration-agriculture-concerns/
Glauber, J., V. Piñeiro, and J.P. Gianatiempo. 2025. “Impacts of US tariffs on Global Agricultural Trade Flows.” Choices 41(1). https://doi.org/10.22004/ag.econ.371495
Grant, J., S. Arita, and Y.E. Karagulle. 2025. “A New Vision for US Trade Policy: What Recent Trade Deals May Mean for US Agricultural Exports.” Choices 40(4). https://doi.org/10.22004/ag.econ.370425
He, X., S. Naing, and S. Devadoss. 2025. “Trade and Supply Chain Impacts of Tariffs on US–Mexico Fresh Vegetable Trade.” Choices 41(1). https://doi.org/10.22004/ag.econ.371494
Jacobson, L. 2025, December 3. “Trump Has Said Tariff Revenue May Allow Americans to Stop Paying Income Taxes. The Math Doesn’t Add up.” PolitiFact. Available online: https://www.politifact.com/article/2025/dec/03/trump-replace-income-tax-tariffs-revenue
Kopack, S., and G. Gutierrez. 2025, December 8. “Trump Announces $12 Billion in Aid to Farmers.” NBC News. Available online: https://www.nbcnews.com/business/economy/trump-farmers-aid-package-china-rcna247988
Liu, Y., M. Gopinath, and J. Robinson. 2025. “Assessing the US Cotton and Textile Industry amid Two Rounds of U.S.–China Trade Tensions.” Choices 41(1). https://doi.org/10.22004/ag.econ.371492
Macias, A. 2025, October 1. “Back-to-Back Highs: August and September Bring in $62.6B in Tariff Revenue.” Fox Business. Available online: https://www.foxbusiness.com/politics/back-to-back-highs-august-september-bring-62-6b-tariff-revenue
Malmström, C. 2025, August 13. “Trump's Very Bad Trade Deal with Europe.” Peterson Institute for International Economics. Available online: https://www.piie.com/blogs/realtime-economics/2025/trumps-very-bad-trade-deal-europe
Marquez, A. and S. Kopack. 2025, July 15. “Trump Readies Blanket Tariffs as He Brushes Off Inflation Worries.” NBC News. Available Online: https://www.nbcnews.com/politics/donald-trump/trump-tariffs-inflation-hasbro-ukraine-patriot-missiles-nato-russia-rcna218125
McKibbin, Warwick J., Marcus Noland, and Geoffrey Shuetrim. 2025. “The Global Economic Effects of Trump’s 2025 Tariffs.” Working Paper. Peterson Institute for International Economics. Available online: https://www.piie.com/sites/default/files/2025-06/wp25-13.pdf
Muhammad, A., C. Martinez, and P. Wyatt. 2025. “The U.S. Beef Industry in a Time of Trade Tensions” Choices 41(1). https://doi.org/10.22004/ag.econ.371493
Naing, S., S. Devadoss, and X. He. 2026. “Fresh Vegetable Net Imports Deepen US Agricultural Trade Deficit.” Choices forthcoming.
Pettypiece, S. 2025, July 2. “10 Times Trump Has Threatened, Then Backtracked on, Tariffs as ‘TACO Trade’ Jab Gains Traction.” NBC News. Available online: https://www.nbcnews.com/politics/trump-administration/10-trump-threatened-backtracked-tariffs-wall-street-embraces-taco-trad-rcna209450
Reed, M. 2001. International Trade in Agriculture Products. Self-published.
Reuters. 2025a, August 6. “Major Developments in Trump's Trade War.” Available online: https://www.reuters.com/business/autos-transportation/major-developments-trumps-trade-war-2025-05-26/
———. 2025b, August 22. “India Approaching U.S. Trade Issue with ‘Very Open Mind,’ Minister Says.” Available online: https://www.reuters.com/world/china/india-approaching-us-trade-issue-with-very-open-mind-minister-says-2025-08-22/
———. 2025c, August 20. “US Treasury Chief Says Status Quo with China ‘Working Pretty Well’.” Available online: https://www.reuters.com/world/china/us-treasury-chief-says-status-quo-with-china-working-pretty-well-2025-08-19/
———. 2025d, August 22. “US-India Trade Talks Scheduled for August Called Off, Source Says.” Available online: https://www.reuters.com/world/india/us-india-trade-talks-scheduled-august-called-off-source-says-2025-08-16/
Ridley, W., and S. Devadoss. 2026. “Impacts of the Trump Administration’s Trade Disputes on U.S. Row Crop Exports.” Choices 41(1). https://doi.org/10.22004/ag.econ.371491
Shepardson, D. 2025, August 19. “US Hikes Steel, Aluminum Tariffs on Imported Appliances, Railcars, EV Parts.” Reuters. Available online: https://www.reuters.com/business/us-hikes-steel-aluminum-tariffs-imported-appliances-railcars-ev-parts-2025-08-19/
Singh, K., and R. Brito. 2025, August 20. “Trump Imposes 50% Tariffs on Brazil After Spat with Lula.” Reuters. Available online: https://www.reuters.com/world/americas/trump-says-us-will-charge-brazil-with-50-tariff-2025-07-09/
Tang, D. 2025, August 20. “A Timeline of the US-China Tariff and Trade Spat Since President Trump Took Office This Year.” Associated Press. Available online: https://apnews.com/article/tariff-china-united-states-timeline-b9ade8491a16f68282ad655395c602bc
The Week. 2025, May 26. “U.S. Hits Brakes on Trade War with China.” Available online: https://theweek.com/politics/us-brakes-trade-war-china.
Zahn, M. 2025, July 22. “What Have Trump’s Tariffs Achieved So Far? Experts Weigh in.” ABC News. Available online: https://abcnews.go.com/Business/trumps-tariffs-achieved-experts weigh/story?id=123859218
Zurita, C., and S. Steinbach. 2025. “2025 U.S. Trade Policy Shifts and Agricultural Exports: Mapping Retaliation Exposure and Assessing Potential Market Access Offsets in the UK and Japan.” Choices 40(4). https://doi.org/10.22004/ag.econ.370426
