Opinion: Skip the big deals; American farmers need a better way to trade

American farmers could benefit from small trade deals
with more countries. (Adobe Stock photo)

Throughout 2025, farm journals and mainstream news outlets published commentaries and new stories outlining how many American farmers don't want bailout or rescue payments. Instead, they want more markets from more countries and a seat at the trade-making table.

"We've been getting trade backward for farmers for 30 years," writes Brian Reisinger in his opinion for The Daily Yonder. "The issue is that since the 1990s, most American trade is a product of big deals with big countries (and often multiple at once, as with the North American Free Trade Agreement)." 

These big trade deals can encompass a vast array of decisions that often go beyond farming into "manufacturing, mining, technology," Reisinger explains. The broad spectrum of deals snuffs out the voice of U.S. farmers.

While NAFTA helped some American farmers by opening foreign markets to them, its changes hurt others. Reisinger adds, "Economists debate the effectiveness of those policies, but the skewed competition [can be] devastating."

This year's bumper soybean crop did little to help many American row-crop farmers, as China avoided U.S. purchases amid U.S.-China trade conflicts. The loss of their biggest customer highlighted "American dependence on China buying soybeans, rather than selling evenly across many markets," Reisinger writes.

A way to evolve and protect U.S. farmers is to de-emphasize big deals. Stephanie Mercier, an economist with the Farm Journal Foundation, said "negotiating on individual products with individual countries — many small deals rather than a few large ones across countless economic sectors — can reduce trade-offs," Reisinger writes.

Trading with multiple smaller countries would help ensure farmers have a voice in the trade process. Reisinger explains, "This could also increase American leverage for farmers, by negotiating with a wide range of countries that need America more, rather than a few big ones like China, or blocks like the European Union."

U.S. farmers may get less aid than first estimated if trade agreement with Mexico and Canada mitigates losses

Farmers hurt by the trade war with China could get less than the U.S. Department of Agriculture's promised $12 billion because of the new trade deal with Canada and Mexico that replaces the North
American Free Trade Agreement, Humeyra Pamuk reports for Reuters.

USDA announced in August that the first $6 billion would include cash payments to farmers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs. Regarding the second $6 billion installment, Agriculture Secretary Sonny Perdue told Reuters the department will be "recalculating along as we go" because the new agreement might lessen the financial pain felt by some farmers.

Pamuk notes, "American farmers have yet to see the full benefit of the new accord as an ongoing dispute over steel and aluminum tariffs mean they still face retaliatory measures when trading with Canada and Mexico. That agreement also does not address the harm as a result of the trade war."

Perdue told Reuters that the steel and aluminum tariffs were "instrumental" in pressuring Canada to negotiate the deal, but now that it has been signed, the tariffs' purpose has been served and he believes the three countries should return to a no-tariff policy on steel and aluminum.

Chances of trade deal with China fade, at least until after elections; U.S. looks elsewhere for leverage

The prospect of resolving the U.S. trade battle with China is fading as the White House draws closer to a deal to revise the North American Free Trade Agreement," Bob Davis and Lingling Wei report for The Wall Street Journal: "The outcomes are related, U.S. officials say. Relaxing trade tensions with Mexico and Canada, plus a preliminary trade agreement with the European Union, have made it easier to forge a multilateral front to oppose Chinese trade practices. The U.S., the E.U. and Japan have already held meetings on such a strategy."

Friendlier relations with trade allies could come in handy as the U.S. prepares to hit China with 25 percent tariffs on $200 billion in goods, since those allies would be less likely to allow Chinese exporters to get around U.S. tariffs by shipping goods through a third country. 

So what happens next? Some trade associations are considering suing U.S. Trade Representative Robert Lighthizer to stop the tariffs, on the grounds that the administration has acted arbitrarily and exceeded its authority in issuing the tariffs. Meanwhile, Chinese officials are trying to buy time, reassuring nervous stock market investors that talks with the U.S. are proceeding.

Lighthizer "has been pressing for deep changes in the Chinese economy, including reduction of subsidies and other industrial policies favoring domestic firms, the Journal reports. Earlier negotiations had focused more on boosting Chinese imports of U.S. goods. . . . But structural changes are the toughest for China to meet."

An unnamed Chinese economic-policy advisor told the Journal that China can afford to be patient until the Nov. 6 elections, in which tariffs could figure. "That would leave very little time to conclude a deal in November, before the G-20 summit," Davis and Wei report. "Chinese officials believe that if Republicans fare poorly in the elections, the president will be weakened in talks with China."  

The U.S. and China could negotiate at the Asia-Pacific Economic Cooperation summit in November, but President Trump plans to skip it. If bilateral talks until then bear no fruit, that leaves only the G-20 conference later in November to reach a deal, the Journal reports.

Foundering NAFTA talks get an extension

Canada, the U.S. and Mexico have agreed to take a break from contentious talks to renegotiate the North American Free Trade Agreement. "Negotiators, struggling to find agreement on some of the thorniest provisions of the trade deal, will take an extended break to consult with politicians and interest groups before convening again in Mexico City for the fifth round of talks in mid-November. The trade talks, which were supposed to wrap up by year-end, have now been extended into the first quarter of 2018, the parties said," Ana Swanson reports for The New York Times.

That's not necessarily good news for pro-NAFTA parties. Upcoming elections in all three countries could influence candidates to take hard-line stances on the trade deal, making an agreement even less likely. The Mexican presidential election will take place July 1, Canada will hold provincial elections through the fall and early winter of 2018, and the U.S. will hold midterm elections Nov. 6.

Another possible wrench in the works: "In the United States, legislation will expire in July that gives the Trump administration more extensive authority to negotiate trade deals and then submit them to Congress for a simple up or down vote, without amendments," Swanson reports. If that legislation, called Trade Promotion Authority, is not renewed, Secretary of Commerce Wilbur Ross told a conference last week that he doesn't think a NAFTA deal will be possible.

"The demise of NAFTA, a deal that has knit together the North American economy over the last quarter century, would be a heavy blow to all three economies. A new study by Impactecon, an American consulting firm, found that the United States would lose 256,000 net jobs if it withdrew from NAFTA, with the most severe impact on low-wage employment. Mexico would lose 951,000 net jobs, and Canada 125,000, the report projected," Swanson reports. "The outcome could also damage the North American security relationship, straining cooperation to combat money-laundering, terrorism, the drug trade and undocumented migrants coming through Central America, the report said."

Hardline American demands put NAFTA and Korea trade negotiations on the ropes

Negotiations on the North American Free Trade Agreement are on the ropes because President Trump's top negotiator, Robert Lighthizer, "is playing such extreme hardball with the Canadians and Mexicans . . . that sources close to the process say there's no chance of a compromise solution unless he changes tactics," Jonathan Swan reports for Axios. Withdrawing from NAFTA could cause big problems for farmers, many of whom voted for Trump. A host of lawmakers are begging Trump to stick with it for the sake of the farmers who depend on it.

Trump also wants a sunset clause that would cause NAFTA to dissolve five years from now unless all parties agree to extend it at that time, and has threatened to withdraw from it summarily unless he gets his way in the negotiations.

The automotive industry could lose out too, which could hurt Republicans since most of the top 10 states for auto manufacturing voted for Trump. A new study says up to 50,000 auto-parts jobs could be lost if the U.S. ditches NAFTA completely, and up to 24,000 jobs could be lost if the U.S. keeps NAFTA but pushes through stringent "Made in America" auto manufacturing requirements.

Trump wants tariff-free cars crossing the U.S. border for manufacturing to be made of at least 50 percent American parts. "That's viewed as a non-starter by virtually every party involved in automobile manufacture," according to The Canadian Press.

Renegotiation of the U.S. trade deal with South Korea, which also helps U.S. agriculture, aren't going so well either, and for much the same reason: hardball negotiation. But a poison pill to torpedo the deal may be the point: "Trump believes to his core that the deal is a scam," Swan writes. The negotiations matter, he says, because "Between NAFTA and KORUS you're talking more than $1 trillion in annual trade in goods and services. Withdrawal would do far more than simply roil the U.S. markets; it would profoundly alter U.S. alliances, test a crucial national security partnership in Asia, and could result in the election of a hard core leftist (and no friend to the USA) in Mexico."

As NAFTA negotiations get to farm products, agricultural leaders speak up

As the North American Free Trade Agreement is renegotiated at President Trump's behest, American farmers want to make sure the administration knows how much the treaty has helped them. "U.S. farm leaders turned up the volume in the debate over the new NAFTA, worried that the success story of food and ag exports isn't being heard among the clamor for tougher U.S. trade rules," Chuck Abbott reports for Agriculture.com. Zippy Duvall, president of the American Farm Bureau Federation, said during a recent teleconference, "We have to be a player in the trade arena so we can move our product out of the country and feed the world." This round of negotiations is expected to be the first to focus on trade in agricultural commodities.

Those who favor NAFTA as it is have reason to worry. Trump said in an interview with Forbes that the U.S. would need to withdraw from NAFTA in order to negotiate better trade deals. And U.S Chamber of Commerce President Tom Donahue said in a speech in Mexico yesterday that "There are several poison-pill proposals … that could doom the entire deal." Phil Levy of Forbes writes, "These include measures such as a 'sunset clause' that would terminate NAFTA after five years unless there was unanimous agreement that it should continue. Or new restrictive rules of origin, dictating which cars would qualify as ‘North American’ for tariff preferences."

Two groups representing wheat farmers, U.S. Wheat Associates and the National Association of Wheat Growers, are bucking the trend, favoring withdrawal from NAFTA so the U.S. can negotiate better deals. "The head of U.S. Wheat said there have been no new trade agreements for a decade 'and zero additional market access for wheat farmers,'" Abbott reports.

NAFTA renegotiations begin; farmers hold breath

Officials from the U.S., Mexico and Canada began renegotiations Aug. 16 on the North America Free Trade Agreement, a 1994 treaty that "eliminated tariffs on most goods traded among the three countries and imposed other rules in areas like intellectual property and labor standards," Danielle Kurtzleben reports for NPR.

The U.S.-Canada negotiations don't seem too contentious thus far. "Canadian companies essentially want more access to American government and construction contracts," Andrew Soergel reports for U.S. News and World Report, though they are seeking several provisions on issues that may be unpopular with the Trump administration, such as gender rights and labor and environmental standards. But the atmosphere surrounding the U.S.-Mexico negotiations has been heating up for months. Those negotiations could have a major impact on the U.S. economy, as well as the state economies of the four states that share a border with Mexico, Christopher Wilson reports for Forbes. Texas, New Mexico, Arizona and California sell 55 percent of all U.S. exports to Mexico. "They facilitate an even greater portion, providing warehousing, transportation and other services for most of the 80 percent of all U.S.-Mexico trade that crosses the land border. If NAFTA were to fall apart, it would be a disaster for the thousands of companies and more than a million jobs along the border that depend on cross-border trade and tourism," reports Wilson.

The current administration has a markedly skeptical view of NAFTA. President Trump criticized it in his campaign, calling it the "worst deal ever made in the history of the world." And U.S. Trade Representative Robert Lighthizer, who is representing the U.S. during the NAFTA negotiations, says he shares Trump's views on NAFTA and promises big changes in the trade deal to "to support higher-paying jobs in the United States and to grow the U.S. economy," Kurtzleben reports. He said the trade deal had "fundamentally failed many, many Americans and needs major improvement," but acknowledged that it had benefitted farmers and ranchers who were able to sell their goods in Canada and Mexico, Kurtzleben reports.

U.S. corn farmers have especially benefited from NAFTA, since they were able to flood the Mexican markets with cheap, U.S. government-subsidized corn, Kirk Semple reports for The New York Times. Though corn is a small fraction of the overall $525 billion in trade between the two countries, it's of huge importance to Midwestern farmers, and Mexico has used it as a symbol of Mexico's dependence on the U.S. In response to Trump's initial threats to overhaul NAFTA completely, Mexico began exploring buying their corn elsewhere and increasing domestic production. Corn farmers, who live in areas that voted heavily for Trump, were shaken by the prospect of losing Mexico as a foreign market. Philip Gordon, who grows corn, soybeans and wheat on his Saline, Mich., farm, told Semple, "If we lose Mexico as a customer, it will be absolutely devastating to the ag economy."

The Department of Agriculture says that "Mexico is not only the leading destination of American corn, but it also imports more dairy products, poultry and wheat from the United States than any other nation, and is one of the top importers of American pork, soybeans and beef," Semple reports. Supply chains for automobiles and other industries criss-cross the U.S.-Mexico border as well; some cars cross the border several times in the course of being manufactured, and eliminating the tariffs in such complicated situations has been a boon to automotive manufacturers.

Farm Bureau asks Obama to restore program for Mexican trucks in U.S.

"In an effort to end trade sanctions against U.S. farm products by Mexico, the American Farm Bureau Federation sent a letter today to President Barack Obama seeking quick development and implementation of a cross-border trucking program that would comply with U.S. obligations under the North American Free Trade Agreement," AFBF says on its Web site.

The program was suspended as part of a recent spending bill. "This action by Congress has come at a cost to U.S. agriculture and our exports to one of our top markets,” AFBF President Bob Stallman said. "We urge you to find a resolution that will honor our obligations under NAFTA, eliminating any cause for Mexico to halt U.S. trade."

"Under the terms of NAFTA, the U.S. and Mexico each agreed to allow trucks from the other nation access into their countries," adds the AFBF. "Unfortunately, the U.S. maintained its restriction on Mexican trucks crossing the border even after NAFTA implementation began." (Read more)

Now that the pilot program has been eliminated, the U.S. finds itself out of compliance with its obligations under NAFTA. Under the treaty, "Mexico has the right to retaliate against U.S. products entering Mexico, and it has done so,” Stallman said. “This retaliation will affect hundreds of millions of dollars worth of fruit, vegetable, nut, juice, wine, processed foods and oilcake exports to Mexico.”