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3471President Donald Trump says his new tariffs will create a wave of wealth for the U.S. economy. “We’re going to become so rich we’re not going to know where to spend that money,” he claimed earlier this month.
But just days after that comment, his administration is already preparing to bail out American farmers who are about to take a hit from those very same tariffs. Agriculture Secretary Brooke Rollins confirmed that emergency aid programs are being set up to “mitigate any economic catastrophes” farmers may face.
This raises a big question: If tariffs are meant to bring in external revenue, why is the government planning to spend internal funds to patch up the damage?
Billions In, Billions Out
Trump’s new trade policy includes a sweeping 10% baseline tariff on all imports and steeper rates for dozens of trade partners. China, for example, is now subject to a 54% effective tariff. The European Union is hit with 20%. Vietnam faces 46%. Even allies like the United Kingdom and Taiwan aren’t spared.
The administration says it used trade deficits to calculate tariff rates, aiming to level the playing field. But many experts and lawmakers argue that the strategy is backfiring.
Farmers were among the biggest losers the last time Trump went to war over trade. During his first term, a similar tariff battle with China caused U.S. agricultural exports to fall sharply. The federal government responded with $28 billion in bailout funds.
This time, Trump is rolling out tariffs more aggressively and broadly. The result? Even before the new tariffs fully take effect, the U.S. Department of Agriculture has already authorized $10 billion in emergency income subsidies.
Bailouts vs. External Revenue
The bailouts raise questions about where the money is really coming from. While tariffs are supposed to be paid by foreign exporters (as Trump claims), economists widely agree that costs are passed on to U.S. consumers and businesses.
Meanwhile, the money used to support struggling farmers is coming from internal sources, like the Commodity Credit Corporation—a federal fund that can borrow up to $30 billion from the Treasury Department.
“If a new regime of tariffs and retaliatory tariffs goes into effect, the question isn’t whether economic pain can be expected, but how much pain, for how long, and to what end?” said watchdog group Taxpayers for Common Sense.
Global Blowback
Retaliation from other countries has already begun. China responded with levies on American exports like soybeans, corn, cotton, and poultry. The European Union, meanwhile, is preparing a list of its own countermeasures.
Even the UK, which is only facing a 10% tariff, called the new duties a “threat” to the global economy. Italy’s Prime Minister Giorgia Meloni said the tariffs are “wrong and not in the interest of either party.”
Canadian Prime Minister Mark Carney warned, “We are gonna fight these tariffs with purpose and with force,” announcing a full set of countermeasures.
Farmers Caught in the Middle
The American farm sector, which relies heavily on exports, is particularly exposed. U.S. agriculture exported $176 billion worth of goods in 2024, with China, Canada and Mexico as the top buyers. As retaliatory tariffs kick in, those markets become harder to access.
Kenneth Hartman, president of the Corn Board of the National Corn Growers Association, told The New York Times, “That’s probably our biggest concern right now,” is that a prolonged trade war could result in permanent loss of market share.
Even Iowa Governor Kim Reynolds, a staunch Trump supporter, acknowledged the fallout. She said she is “working directly with the administration to ease the short-term impact” and to keep Iowa’s farm economy afloat.
A Golden Age or a Growing Tab?
Trump insists his policy will result in a “Golden Age of America” marked by lower prices, more competition, and the return of domestic manufacturing. But the early signs point in the opposite direction: falling stock markets, rising consumer prices, and another round of taxpayer-funded bailouts.
Sen. Peter Welch (D-Vt.) said plainly: “Trump’s so-called ‘liberation day’ will throw the global economy into turmoil and leave Americans holding the bag.”
So far, the U.S. is spending billions to support farmers hit by policies that were supposed to bring in billions. If this is economic independence, it’s coming with a hefty internal bill.
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