The Trump administration says new tariffs will help the US make up its trade deficit with the rest of the world and they're blaming former President Biden.
By MELISSA GOLDIN
As President Donald Trump announced a $12 billion farm aid package this week to help U.S. farmers hurt by tariffs, he placed responsibility for the U.S. agricultural trade deficit on former President Joe Biden.
But in casting blame elsewhere, he is ignoring other factors, including his own role. Currently, farmers — especially those that produce soybeans and sorghum — have had a hard time selling their crops while getting hit by increasing costs after Trump raised tariffs on China earlier this year as part of a broader trade war that has contributed to the deficit.
Experts say that it is a massive oversimplification to blame any one administration or policy.
Here’s a closer look at the facts.
CLAIM: There was an agricultural trade surplus during Trump’s first term that former Biden turned into an agricultural trade deficit.
THE FACTS: This is both misleading and missing context. It is true that there was an agricultural trade surplus when Trump entered the White House in 2017, which has since become a significant deficit. However, according to experts, this can be attributed to actions taken by both administrations, as well as factors outside their control such as the COVID-19 pandemic.
“I don’t want to let U.S. trade policy off the hook here, but it’s one element of a broader, more complicated kind of story,” said Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics.
Still, Trump held Biden solely responsible for the agricultural trade deficit at a White House roundtable Monday where he announced the farm aid package.
“In my first term, we had an agricultural trade surplus by a lot,” the president said, misrepresenting the numbers. “We had a big surplus. We knew we were exporting American agricultural products all over the world, making a net profit and, in many cases, a very substantial profit. He came in and ruined it. Biden turned that surplus into a gaping agricultural deficit that continues to this day.”
What the numbers show
The yearly agricultural trade balance, which reflects the amount of those goods the U.S. has exported versus the amount it has imported, had been positive for nearly 60 years until 2019 during Trump’s first term.
According to data from the Department of Agriculture, it stood at a surplus of approximately $16.3 billion at the end of 2016 and fell the next year, Trump’s first as president, to one of about $13.66 billion. The balance further decreased over the next two years, ultimately turning into a deficit of about $481 million. It returned to a surplus in 2020 at about $3.39 billion, which further increased in 2021 — the year Biden entered the White House. In 2022, it transitioned back to a deficit that grew to approximately $36.45 billion by the end of 2024. As of August, the latest data available, there was an agricultural trade deficit of about $36.3 billion.
The yearslong trade war between the U.S. and China is partly to blame for the agricultural deficit, experts say. Trump fired the first shot in January 2018, with 30% tariffs on imported solar panels, which led to additional tariffs and import curbs from both sides that continued to a certain extent under Biden.
The countries signed a Phase One trade deal in January 2020 through which China committed to buying an additional $200 billion of U.S. goods and services over the next two years. However, the Peterson Institute later found China had bought essentially none of the goods promised.
What is the current situation?
Trump has instituted even more tariffs on Chinese imports since returning to the White House. In response, China has retaliated with tariffs and import curbs on U.S. goods, including key farm products.
The White House said in October, after Trump met with Chinese leader Xi Jinping in South Korea, that Beijing had promised to buy at least 12 million metric tons of U.S. soybeans by the end of the calendar year, plus 25 million metric tons a year in each of the next three years. China has purchased more than 2.8 million metric tons of soybeans since Trump announced the agreement, according to AP reporting. That’s only about one quarter of what administration officials said China had promised, but Treasury Secretary Scott Bessent has said China is on track to meet its goal by the end of February, which is two months later than the White House originally promised.
“China’s been refusing large U.S. purchases in favor of other trade partners,” said Hendrix. “This is a lamentable, but kind of predictable, consequence of the United States engaging in this trade war and weaponizing trade policy. Our trade partners are going to seek to diversify both for self-insurance — we’re talking about food, we’re talking about survival here — and to punish the U.S. for kind of changing the rules of the game so unilaterally.”
But there are myriad other factors that have contributed to the current deficit, experts say. For example, high purchasing power enabled by a strong U.S. dollar and a desire by U.S. consumers to buy high-value goods that aren’t produced domestically. A stronger dollar also decreases demand for U.S. exports, as this makes it more difficult for other countries to buy those products.
In addition, Brazil and Argentina have begun exporting soy, corn and beef, competing directly with U.S. exports and lowering prices for such goods. Major world events of which the U.S. government has little or indirect control, such as the COVID-19 pandemic, climate variability and the Russia-Ukraine war, have also contributed.
“The tariffs can exacerbate the situation, but generally the fact that you may have a deficit or a surplus is really more dependent on global prices,” said Joseph Glauber, a senior fellow at the American Enterprise Institute who served as the Department of Agriculture’s chief economist from 2008 to 2014 under Presidents George W. Bush and Barack Obama.
Asked whether Trump blames solely Biden for the agricultural trade deficit, White House spokeswoman Anna Kelly said that “farmers suffered for years under Joe Biden,” but that Trump is committed to “helping our agriculture industry by negotiating new trade deals to open new export markets for our farmers and boosting the farm safety net for the first time in a decade.”
