On Wednesday morning, the second part of President Donald Trump’s “Liberation Day” tariffs went into effect – country-specific reciprocal tariffs that hiked duties on around 60 trading partners deemed the “worst offenders” for adopting unfair trade policies.
Combined with the across-the-board tariff that kicked in Saturday, the moves slap new duties on nearly all U.S. imports. Sweeping new tariffs will ripple across the farm economy, squeezing farmers on all sides by driving consumer prices up – including for critical ag inputs – shrinking key export markets, and potentially worsening a long-running labor crisis, analysts and industry representatives tell Agri-Pulse.
But the effects won’t be distributed evenly, they say, and certain products and sectors will bear the brunt of new tariffs.
Food price pressures
Products set to feel the swiftest price hikes are those the U.S. does not produce domestically and those with simple supply chains with just one or two players, Andrew Harig, vice president for tax, trade and sustainability at FMI-The Food Industry Association, told Agri-Pulse.
Something like a car, he said, which has a complex, multistep value chain, can share the tariff hit across supply chain participants, potentially softening the impact on the consumer. But a product like bananas may go straight from the farmer to a packing house, a storage facility and the grocery store.
That’s “harder to spread those costs throughout the supply chain,” Harig said. “A lot of those raw products are going to get more expensive.”
Similarly, products without a domestic U.S. industry that can increase yields or production to meet demand will also be particularly exposed to price increases.
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Around 90% of bananas, for example, come from just five countries – Colombia, Costa Rica, Ecuador, Guatemala and Honduras – according to the Banana Association of North America. All were hit by the 10% baseline tariff announced last week.
Mangoes, pineapples, coffee, cocoa and a raft of spices lack a domestic sector, Harig said, which will affect prices of both produce and downstream products. The U.S. also imports around 79% of its seafood, according to the Agriculture Department, and strict farm and catch limits prevent the rapid scaling-up of the domestic industry.
Perishable products like fruit and vegetables could see price hikes kick in fairly swiftly, said Harig and Rebeckah Adcock, vice president of government relations at the International Fresh Produce Association. Perishables don’t sit in storage like processed goods, and Harig estimated price hikes could appear in “a week or two.”
Adcock, however, said supermarkets may decide to absorb costs, particularly in fresh produce.
These are the products that “they want to show off and that people judge the grocery store by,” Adcock said, arguing firms may decide that accepting tighter profit margins on fresh produce may make the most business sense.
Over the longer term, products with plastic packaging could see prices begin to creep up because of higher input costs for manufacturers. The U.S. sources most of its paper packaging from Canada, according to World Integrated Trade Solutions, which was spared from the latest reciprocal tariffs. But plastic packaging is often sourced from China or other countries hit with high additional duties.
Specialty packaging like pump handle tops, Harig said, could see price spikes similar to those that occurred during the pandemic. Condiments, for example, could be particularly affected. Plastics is not the kind of industry that is easy to reshore either, Harig argues, given the low profit margins and transportation and environmental challenges.
Farm inputs
Farm inputs like fertilizer and machines won’t escape price bumps. Potash, certain herbicides and pesticides, veterinary products and peat received specific carveouts. But the tariffs still hit urea – just as farmers are applying the fertilizer.
The day after Trump announced the new tariffs, the price of urea jumped $30-$40 a ton, Josh Linville, vice president of fertilizer at StoneX, told Agri-Pulse. Linville says around half of the more than 5 million tons of estimated urea imports for this financial year are already in the U.S. But some 2.6 million tons are still set to enter the country before the end of May.
“Some of those tons are done on contractual obligations,” Linville said, “But there's still a chunk of it that's still done on spots,” he said, and those will be valued at whatever the market price is at the time.
Russia, a major U.S. supplier, has been spared from reciprocal tariffs, with White House officials argued that ongoing sanctions prevent “meaningful” trade with the country. But other sources of urea like Saudi Arabia, Algeria and Qatar face new duties – in Algeria’s case as much as 30%.
How long prices remain elevated will depend on what comes next, and whether the administration negotiates any tariff relief, Linville said.
“This was, to me, a kind of a knee-jerk reaction,” Linville said. “This was the market's way of saying, ‘Oh my gosh. I don't know what to make of all this, but I know it should mean prices are higher.'"
Prices could settle once the administration provides clearer signaling on which tariffs may be permanent and which might come down, he said.
“The world's never seen something like this,” Linville said.
But if many tariffs stay in place, Linville said, some partners could use fertilizer exports to retaliate. When the U.S. slapped countervailing duties on Moroccan and Russian phosphate fertilizer, the countries stopped sending product to the U.S., even though Linville argued it made business sense to do so.
“That could certainly become the case for urea going forward”, Linville wrote in a follow-up email.
Manufacturers of farm machinery are also eying price hikes to retain profitability. Kuhn North America, for example, sources around a quarter of its stock from Europe, which is now subject to an additional tariff of 20%.
“That would be essentially more than our margin,” Greg Petras, president of Kuhn North America, told Agri-Pulse. “There's a lot to work out in terms of price competitiveness and what we can do and what we can't do, what we can absorb, what we can't absorb.”
In the meantime, Petras said, shipments are on hold as the company undertakes an analysis. This analysis could have been done without business interruption, Petras added, had business been given more runway between the tariff's announcement and its implementation.
“There's absolutely no coherent strategy that supports doing things this way,” Petras said.
Retaliation
The full scale of retaliation from U.S. trading partners has not come into focus. China hit back swiftly with a 34% tariff on U.S. products – matching the initially announced U.S. rate. China has since raised the rate to 84%, after the U.S. hiked its reciprocal tariff.
A European Union spokesperson said the bloc could assemble its own measures as soon as next week. But other countries have held off while they try to negotiate possible concessions.
The Chinese retaliation alone has plenty in the agriculture sector worried.
“I think it will effectively shut the U.S. out of that market, except for special circumstances,” Jim Sutter, CEO at the U.S. Soybean Export Council, told Agri-Pulse sh
Jim Sutter (LinkedIn photo)ortly after the 34% announcement.
More than 60% of U.S. soy is exported, according to the United Soybean Board, and around half of all U.S. soybean exports go to China. The U.S. faces intense competition in the Chinese market from Brazil. A 34% tariff would hand market share to Brazilian exporters, Sutter said, as happened during Trump’s first term. Accordingly, an 84% tariff could be even worse.
“This is a trade that looks at pennies and cents per bushel,” Sutter said. A 34% tariff is “a huge amount of money in the soybean world," he said,to say nothing of the new 84% rate.
The U.S. would likely continue to supply beans destined for China’s state reserve program, he said. Those programs need drier soybeans with a longer shelf life, like those the U.S. provides. But U.S. beans would be uncompetitive on the commercial Chinese market.
The U.S. cotton sector is also closely watching signs of retaliation, Kevin Brinkley, president of Plains Cotton Cooperative Association, told Agri-Pulse.
More than 80% of U.S. cotton is exported. China, typically a major buyer of U.S. cotton, has already significantly scaled back its purchases in 2025. Now many alternate destinations for U.S. exports are reeling from some of the steepest tariffs.
India faces a new tariff of 27%, Pakistan 30%, Bangladesh 37% and Vietnam 46%.
“Those have been some of the higher numbers that you've seen,” Brinkley said, sparking anxiety about retaliation among cotton producers.
Labor pains
If tariffs achieve their stated goals, which some economists doubt, they could invite more challenges for U.S. agriculture.
The president and some of his senior officials touted tariffs as a way to reshore U.S. manufacturing and grow the U.S. industrial base. With the agriculture industry already struggling to find the necessary workforce, labor competition from manufacturing could worsen the labor shortage, Adcock said.
Labor, Adcock said, is the “No. 1 limiting factor” for why producers can’t expand growing operations, even more than lack of demand.
“We already don’t have enough people,” Adcock said. This is something “the government can help with,” she added, and something “the government does have control over.”
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