The Last Harvest, Part 4: Global Markets & Trade

Analysis of international competition, trade wars, and how export policies affect domestic food security

Feb 04, 2025

[Authors note: this is the fourth of an eight-part series for an ongoing research piece and the analyses will be expanded with new research and insights. Please subscribe for further updates.]

THE LAST HARVEST SERIES
Synopsis
Part 1 of 8: Labor Market
Part 2 of 8: Economy & Policy
Part 3 of 8: Historical Parallels
Part 4 of 8: Global Markets (You are here)
Part 5 of 8: Water Resources
Part 6-8: [Coming soon]

4.1. Trade Wars & Tariffs: A History of Unintended Consequences

The 2018-2019 trade war with China serves as a reminder of how quickly global market disruptions can devastate American farmers. The U.S. imposed tariffs on Chinese imports, prompting China to retaliate by slashing its purchases of U.S. agricultural goods—particularly soybeans, corn, and pork commodities from U.S. farm exports.

The impact was immediate and severe. U.S. agricultural exports to China plummeted from $19.5 billion in 2017 to just $9.1 billion in 2018, pushing countless farmers into financial distress. The government rushed to enact the 2018 Farm Bill, an effort to provide relief, but the reality was that we saw the largest bankruptcy and decline in small-family farms in U.S. history.

Now, in 2025, a new wave of trade volatility is emerging, following a similar pattern.

4.2. The 2025 Trade Turmoil: Instability at a Critical Moment

Just last week, the U.S. announced new tariffs on Canada (25%), Mexico (25%), and China (10%), triggering concerns across the agricultural sector. Economists argue that, in theory, such measures could increase domestic demand for U.S. farm products, but as past trade wars have shown, retaliation is almost inevitable—and the consequences often outweigh the intended benefits.

The reaction began in less than two days, Canada immediately imposed a 25% retaliatory tariff on key U.S. goods. While the initial wave of tariffs didn’t directly target agriculture, they did impact many products that rely on farm commodities for production. To note, Canada is the world’s largest producer of potash, a key potassium-rich fertilizer—46% of which is exported to the U.S. Any disruption in this trade could directly drive up costs for American farmers.

Mexico, a top importer of U.S. corn and soybeans, similarly responded with a tariff and nontariff response in which an estimated 1.7 million jobs could be lost in the U.S. (mostly in the South and Midwest).

Fortunately, U.S., Canada, and Mexico rescinded their tariffs less than a week after implementing them. This constant policy whiplash leaves farmers in limbo, unable to plan for the season ahead. Unlike large multinational agribusinesses, which have diversified export channels and financial buffers, independent farms are hit hardest by unpredictable trade policies.

4.3. Export-Driven Domestic Scarcity: A New OPEC for Food?

As corporate consolidation intensifies, U.S. agriculture is beginning to mirror the behavior of another critical industry: energy. Just as OPEC nations manipulate oil supply to control global pricing, we are seeing the emergence of corporate-controlled food exports shaping the global agricultural market.

Fewer firms now dominate exports, meaning that global food markets are more sensitive than ever to corporate pricing decisions. These firms are incentivized to prioritize higher-profit export markets, creating a dangerous scenario: domestic food production can increase while domestic food prices also rise. This pattern is already familiar. Despite record oil and gas production, U.S. energy prices remained high throughout the early 2020s because corporations prioritized global sales over domestic supply. Agriculture will follow the same trajectory. I don't know about you, but we stopped having food fights in primary school. I can't imagine the domestic and global toll it will take on society when our food supply chains are weaponized.

If corporate agribusiness treats food as a global commodity first and a domestic necessity second, American consumers could find themselves in a paradox where they pay more for food that is grown within their own borders.

4.4. How Government Policies Distort the Market and Leave (especially small-family) Farmers Behind

Beyond trade wars, the U.S. government has a long history of directly interfering with agricultural markets—often with unintended consequences. In past decades, the federal government has forbidden the export of certain crops to foreign markets. The result? Domestic prices collapsed, forcing the government to introduce subsidies just to keep farmers afloat. Likewise, some EPA-banned agricultural chemicals and fertilizers (for the sake of our own health) are still legally sold by U.S. companies in foreign markets where regulations are weaker. This means that foreign farmers can access inputs that are illegal for American farms, allowing them to produce crops at lower costs and compete more aggressively in global markets. While the intent behind U.S. environmental and consumer protection regulations is justifiable, the double standard it creates puts domestic farmers at a significant disadvantage in price competitiveness.

Even more damning is how multinational agribusinesses manipulate pricing between domestic and foreign markets to their advantage. American agricultural corporations often sell inputs and equipment to foreign farmers at a fraction of the domestic price. For example, a product that may be charged at $35 per unit in the U.S. is easily sold for just $3 per unit in another country. This then allows foreign farms to undercut U.S. farms in the global marketplace, worsening the competitive disadvantage for American farmers. U.S. farmers are locked into competing in global commodity markets where their competitors have significantly lower cost structures. The very companies that profit off American agriculture are simultaneously giving foreign farms an edge over their U.S. counterparts.

4.5. They that Control the Land and Food

One of the biggest unknowns in this shifting landscape is what happens when small and mid-sized farms vanish. Large agribusinesses primarily operate within global commodity markets, while small-to-mid-sized farms play a crucial role in regional and domestic food supply chains. Historical parallels, industry consolidations and collapses that left regional economic holes gives us reason to believe this newly established domestic food supply will cause prices to rise for consumers. Considering you can't eat petroleum, I'm concerned previous parallels we have considered may be stark in comparison to the literal demand food has on our survival. Without competition from smaller producers, will corporate agribusinesses manipulate food prices the same way Big Oil has done with energy?

Without small farms helping self-sustain regional economies that can oftentimes be shielded from global shocks, what happens when they disappear and our agricultural industry becomes a global bargaining chip? The consequences extend beyond price volatility—they could reshape geopolitical alliances, destabilize supply chains, and introduce food insecurity risks to an extent the entire U.S. economy is not prepared for.

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The most disturbing fact of all? Everything we've discussed prior to this is made up of people, places, systems, inputs, and outputs that as a society can have certainties about, predict and protect, and control for. As we will see in the next section, the agricultural industry is more vulnerable than ever to ecological constraints, and start to move further away to systems we can't control. We will then conclude with discussing how every single one of these trends have put us in multiple perilous states—paths that we no longer ask "if". It's just a matter of "when". And we have absolutely no tools to accurately predict the timing or magnitude that openly welcome the occurrences of events that are even outside the scope of black swans—radical uncertainty, unknowable rareness, and beyond the realm of any computational or probabilistic reasoning.

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[Author’s note: this complete series is in draft form. References, sources, and citations will soon follow. If for any reason you find material on here that you have copyright ownership to and would like for me to immediately include credit or remove complete, please email me directly at chris@questioningrural.com.]

Questioning Rural