Tariffs can trigger retaliatory actions in markets that affect farmers and agricultural products.
The federal government provides one-time payments for tariff relief, which some states have also proposed.
MO uses agricultural tax incentives to lower costs for farmers, processors, and lenders.
Tariffs are taxes imposed on imported goods, which increase the cost of domestic sales by artificially increasing the cost of these imported goods (Tax Foundation n.d.). Taxed countries can respond with retaliatory tariffs, making the first country’s exports less competitive (Tsui & Rosch 2025).
Between January and May 2025, the U.S. imposed new tariffs on numerous trade partners, including Canada, China, Mexico, and the European Union (Congressional Budget Office 2025, United Nations Trade and Development 2026). Canada and China issued retaliatory tariffs on U.S. imports (Department of Finance Canada 2025, Ministry of Finance of the People’s Republic of China 2025, Tsui & Rosch 2025). Canadian tariffs targeted approximately $5.9 billion in U.S. agricultural products, while Chinese tariffs targeted about $21 billion of U.S. agricultural exports, including soybeans, cotton, and corn (Tsui & Rosch 2025).
By financial value, the U.S. exports 20% of its agricultural and food production (U.S. Department of Agriculture (USDA) Economic Research Service 2025). In 2024, China bought $12.6 billion of soybeans from the U.S., more than half of U.S. soybean exports (USDA Foreign Agricultural Service n.d.). This amount decreased to $3.1 billion in 2025, as China stopped buying U.S. soybeans in the summer in favor of importing from Brazil (Colussi & Langemeier 2025a). In November 2025, the U.S. and China announced a trade agreement to lower both their tariff rates and resume soybean sales (Colussi & Langemeier 2025b, Executive Office of the President 2025).
Tariffs’ effects on markets, unemployment, and inflation are difficult to measure (Halbersleben et al. 2025). Other nations’ retaliatory tariffs in 2018 and 2019 led to U.S. agricultural export losses of more than $27 billion (Morgan et al. 2022). After the U.S. imposed tariffs on fertilizer imports in April 2025, fertilizer price increases exceeded the added tariff amount (Arita et al. 2026). Following the rollback of this tariff in November 2025, wholesale fertilizer prices for businesses decreased, but retail prices for consumers have declined at a slower rate.
States lack the resources to provide financial support to farmers affected by tariffs (personal communication Coppess 2026). At the federal level, the USDA’s Commodity Credit Corporation (CCC) provides funds to businesses affected by agriculture tariffs (USDA n.d.). In 2026, the CCC is providing one-time payments of up to $155,000 to farmers of row crops, such as soybeans and corn, affected by market disruptions (Beam 2025, Table 1). The CCC has allocated $11 billion for these payments.
In response to China’s retaliatory tariffs, IL declared an agricultural trade crisis (IL Executive Order 2025-07). The state’s Department of Agriculture and Department of Commerce were ordered to coordinate to develop and enhance domestic markets for agriculture commodities, and to expand the state’s mental health support system for farmers facing economic instability. TN lawmakers proposed a state fund of $130 million to provide grants of up to $10,000 to farmers affected by tariffs (TN SB 2687 2026).
While MO has not enacted any tariff relief measures, the state offers tax incentives for farmers, agricultural processors, and lenders (MO Department of Agriculture n.d.). Farm owners that sell or rent their land to a beginning farmer may qualify for the Beginning Farmer Tax Deduction. The Urban Farm Investment Tax Credit supports farmers in urban areas with establishment or improvement expenses.
Meat processing facilities can qualify for the Meat Processing Facility Investment Tax Credit. Companies that process raw agricultural commodities into finished goods can receive the New Generation Cooperative Incentive Tax Credit if they receive investment from local producers.
MO offers two tax credits to encourage loans to specific types of farms. The Family Farm Breeding Livestock Credit provides a tax credit to MO-based lenders who loan money to livestock breeders. Lenders who support resources for farming specialty crops qualify for the Specialty Agricultural Crops Tax Credit. For more information, see the Memo on Agricultural Tax Incentives.
Table 1. Summary of federal and state agriculture tariff relief actions.
| Where | Action |
|---|---|
| United States (USDA) | One-time payments of up to $155,000 for farmers affected by market disruptions. $11 billion allocated for relief payments. |
| Illinois | State agencies ordered to improve domestic trade markets and expand mental health services for struggling farmers. |
| Tennessee (proposed) | Would create a state fund of $130 million that pays grants up to $10,000 for farmers affected by tariffs. |
References
Arita S, Chakravorty R, Kim J, Lwin WY, Steinbach S, et al. (2026) IEEPA Fertilizer Tariffs: Revenue, Relief, and Pass-Through. NDSU Agricultural Trade Monitor. https://www.capts-ndsu.com/_files/ugd/3c6228_df79f1f42b5f4d98a0428a2c43085b98.pdf
Beam W (2025) Farmer Bridge Assistance (FBA) Program. Federal Register. 2026-03456 (91 FR 8360) https://www.federalregister.gov/documents/2026/02/23/2026-03456/farmer-bridge-assistance-fba-program
Colussi J, Langemeier M (2025a) U.S. Soybean Harvest Starts with No Sign of Chinese Buying as Brazil Sets Export Record, Purdue University Center for Commercial Agriculture. https://ag.purdue.edu/commercialag/home/resource/2025/09/u-s-soybean-harvest-starts-with-no-sign-of-chinese-buying-as-brazil-sets-export-record/
Colussi J, Langemeier M (2025b) U.S.–China Soybean Deal: Comparing Past Export Levels and Global Market Impacts. Farmdoc Daily. 15(212). https://farmdocdaily.illinois.edu/2025/11/us-china-soybean-deal-comparing-past-export-levels-and-global-market-impacts.html
Coppess JW (2026) Professor of Agricultural Policy, Deptartment of Agricultural and Consumer Economics, University of Illinois Urbana-Champaign. Personal communication.
Department of Finance Canada (2025) List of products from the United States subject to 25 per cent tariffs effective March 4, 2025. https://www.canada.ca/en/department-finance/news/2025/03/list-of-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-march-4-2025.html
Executive Office of the President (2025) Modifying Reciprocal Tariff Rates Consistent With the Economic and Trade Arrangement Between the United States and the People's Republic of China. Federal Register. 2025-19826 (90 FR 50729). https://www.federalregister.gov/documents/2025/11/07/2025-19826/modifying-reciprocal-tariff-rates-consistent-with-the-economic-and-trade-arrangement-between-the
Halbersleben N, Jordà Ò, Nechio F (2025) The Economic Effects of Tariffs. Federal Reserve Bank of San Francisco. Economic Letter 2025-29. https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/11/economic-effects-of-tariffs/
IL Executive Order 2025-07 (2025) Executive Order To Respond To Agricultural Trade Crisis And Farm Financial Distress Stemming From The Trump Administration’s Trade Policy. https://www.illinois.gov/government/executive-orders/executive-order.executive-order-2025-07.2025.html
Ministry of Finance of the People’s Republic of China (2025) Announcement of the Customs Tariff Commission of the State Council on Adjusting Additional Tariff Measures on Imported Goods from the United States. https://gss.mof.gov.cn/gzdt/zhengcefabu/202504/t20250411_3961823.htm
Missouri Department of Agriculture (n.d.) Tax Credit/Tax Deduction. https://agriculture.mo.gov/abd/financial/masbda/tax-credit.html
Morgan S, Arita S, Beckman J, Ahsan S, Russell D, et al. (2022) The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture. USDA Economic Research Service. ERR-304 https://www.ers.usda.gov/publications/pub-details?pubid=102979
Swagel PL (2025) Budgetary and Economic Effects of Increases in Tariffs Implemented Between January 6 and May 13, 2025. Congressional Budget Office. 61389. https://www.cbo.gov/publication/61389
Tax Foundation (n.d.) Tariffs Definition. TaxEDU Glossary. https://taxfoundation.org/taxedu/glossary/tariffs/
Tennessee S.B. 2687, 114th General Assembly, 2026 Regular Session (TN 2026). https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=SB2687&GA=114
Tsui B, Rosch S (2025) Retaliatory Tariffs on U.S. Agriculture and USDA’s Responses: Frequently Asked Questions. Congressional Research Service. R48548. https://www.congress.gov/crs-product/R48548
United Nations Trade & Development (2026) Tariff dashboard – tracking the evolution of US tariffs. https://unctad.org/topic/trade-analysis/tariffs/tariff-dashboard
U.S. Department of Agriculture (USDA) (n.d.) Commodity Credit Corporation. https://www.usda.gov/farming-and-ranching/resources-small-and-mid-sized-farmers/commodity-credit-corporation
USDA Economic Research Service (2025) U.S. Agricultural Trade - U.S. Agricultural Trade at a Glance. https://www.ers.usda.gov/topics/international-markets-us-trade/us-agricultural-trade/us-agricultural-trade-at-a-glance
USDA Foreign Agricultural Service (n.d.) Soybeans. https://www.fas.usda.gov/data/commodities/soybeans
