President Donald Trump’s trade wars are pushing America’s rural economy toward a full-blown meltdown after years of economic disaster, causing more farmers to default on loans while putting the pressure on agricultural lenders.
Farmers have seen their net income fall by half since 2013 and are now expected to hold nearly $427 billion in debt this year — the most since the farm crisis in the 1980s. The default rate for farm loans held by banks hit its highest level in seven years in the first three months of 2019.
In Iowa earlier this month, Trump blamed his predecessors who “did nothing” about decreasing farm income, while crediting his own administration for “turning it all around.”
Except he hasn’t. Instead, his trade battles have accelerated the decline of financial conditions. Retaliatory tariffs from major trading partners like China and Mexico have slammed U.S. farm exports and taken a chunk out of stock prices. And soaring debt levels are pushing more and more farmers and shepherds — already suffering from epic floods — toward poverty.
Grant Kimberley, a corn and soybean grower in Iowa, sees growing risk as many farmers burn through their equity, sink further into debt to leave the business completely. Many producers are staying afloat by putting off fixing their tractors and sacrificing other investments in their farm operations, he said.