Rural Iowa is quietly taking the brunt of what some are calling the most severe economic downturn in the nation. In the first quarter of 2025, Iowa’s GDP dropped by 6.1%, or the second-worst in the country behind only Nebraska.
But the real twist? It’s happening under the leadership of the very man Iowans voted in to fix the economy: President Donald Trump.
“Right now, we’re fighting different economic wars all at once,” one Iowa farming family told The New York Times.
“You can sustain it one at a time, but right now it’s death by a thousand paper cuts.”
Farmers Crushed by Tariffs, Lost Markets
As political commentator Brian Tyler Cohen broke it down in his recent video, Iowa is the top corn producer and the second-largest soybean producer in the U.S., and much of that soybean crop historically went to China.
In 2024 alone, Iowa exported $12.6 billion worth of soybeans to China. But after Trump imposed new tariffs, China stopped buying altogether.
“I’m not exactly sure how we repair some of these relationships,” said the Iowa Soybean Association chief Kirk Leeds. “This is as challenging as I’ve seen it. We’ve got uncertainties beyond compare.”
To make matters worse, Trump announced a $20 billion bailout package — not for Iowa farmers, but for Argentina. China then filled its soybean supply gap by turning to Argentine producers. So while Iowa lost a major export partner, their competitors got a boost.
“Who are you subsidizing, our competitors or us?” one Iowa farmer asked.
High Costs and Vanishing Jobs
The ripple effects don’t end there. Fertilizer prices are up 14%, and tariffs have pushed up equipment costs across the board. John Deere alone has taken a $300 million hit due to tariffs on steel and aluminum, resulting in hundreds of layoffs.
“We would much rather farm with no federal assistance whatsoever,” said one Iowa farmer who voted for Trump. “We want to be able to sell our products for a good value, and normally we can.”
But even Trump’s promised bailouts disproportionately benefit large operations, pushing small family farms further to the margins.
Former Agriculture Secretary Sonny Perdue spelled it out back in 2019: “In America, the big get bigger and the small go out.”
Labor Shortages From Deportations
Trump’s strict immigration policies are also making things worse. Meatpacking plants — essential to Iowa’s pork industry — rely on immigrant labor. But hundreds of workers from Haiti, Cuba, El Salvador and Honduras lost their legal status under Trump’s second term.
“It’s difficult to find domestic workers who take these jobs,” one Iowa economist said. “It’s not costless to replace that number of workers.”
Even renewable energy, which has been a reliable source of income for some Iowa farmers, is under attack.
Wind turbines are now a target of Trump’s administration, despite Iowa’s long-standing leadership in wind energy production.
Mark Cuban Weighs In: ‘They’re Getting Toasted’
Billionaire entrepreneur Mark Cuban also pointed out the economic pain in red states like Iowa. In a recent interview with The Tennessee Holler, Cuban said:
“That toasting is not happening in New York or Los Angeles or Boston as much as it’s happening in Parkersburg, West Virginia, York, Pennsylvania, the reddest areas of the country.”
He emphasized that while wealthier Americans in big cities are still doing well, rural communities are getting hit with rising prices, job losses, and service cuts.
“If you’re a farmer, you’re a beef farmer in Nebraska, soybean farmer, if you’re just working your day-to-day job and just trying to get through the day, you’re getting toasted,” he said.
Cuban also noted the consequences of Social Security office closures in these areas. “All those things had a significant negative impact on the amount of funds they had for their communities.”
A Healthcare Crisis on Top of It All
Cuban, who founded Cost Plus Drugs to bring transparency to prescription medication pricing, said many Americans aren’t struggling just with premiums, but with deductibles.
“Your problem isn’t whether or not you have insurance,” he said. “Your problem is you can’t afford the deductible. You might as well not even have insurance.”
He suggested that the government should back deductibles the same way it does with mortgages or student loans, so hospitals aren’t forced into becoming “subprime lenders.”
What About Small Business?
Cuban also criticized both parties for ignoring the small businesses that keep rural economies afloat. “You never hear [Trump] talk about small businesses or entrepreneurs. Never. But you never hear the Democrats talk about them either,” he said.
He believes Democrats should stop focusing only on abstract ideas like “saving democracy” and instead show how their policies can make life better today.
“How do you reduce their stress?” he asked. “Whatever it is you’re talking about, how does it impact someone’s life today?”
2026 Could Be a Turning Point
With Iowa’s economy on the ropes and elections looming, 2026 could prove pivotal. The state will see competitive House races and new candidates for governor and senator. All are Republican-held seats.
“People are hurting everywhere in Iowa, and they’re looking for something different,” one Democratic Senate candidate told The Times.
The Bottom Line
Cohen summed it up this way: “We’re talking about the worst economic collapse in the nation happening in deep red Iowa under the watch of the guy they voted for to supposedly fix the economy.”
Iowa voted for Trump because he promised to fight for them. Instead, their GDP dropped 6.1%, their $12.6 billion soybean export market vanished, costs went up, jobs disappeared, immigrant labor was pushed out, and their global competitors got subsidized with U.S. taxpayer dollars.
As Cohen put it:
“If that’s what America First looks like, Iowa has every right to ask where exactly do we fit in?”
As farmers and small-town workers reevaluate the trade-offs they’ve made, the big question becomes: Will they continue to support the very policies that have chipped away at their livelihoods?