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Farmers are in Trouble—Restructuring the USMCA Could Turn Things Around
New labeling requirements to ensure the integrity of domestic markets, as well as price guarantees tied to anti-dumping measures, could improve the economic prospects of producers amid our ongoing trade war.
Sep 16, 2025
Farmers may be the proverbial “canaries in the coal mine” when it comes to the effects of US President Donald Trump’s grand tariff experiment.
Point in fact—corn and soy prices are experiencing precipitous falls in no small part due to tariffs that China has placed on US imports. Cotton prices are dropping for the same reason, as nearly 80% of this crop is destined for export and China slapped a 15% retaliatory tariff on it. Prices for pork and beef appear on a different trajectory, with the latter benefiting from domestic shortages. But even here, trouble is on the horizon as China has cut back on imports from the US. This, as Brazil is exporting more soy, beef, and cotton to China to replace what US farmers once sent. It is no coincidence that the percentage of farm income in 2025 coming from government payments—25%—is approaching the level it was at when the Covid-19 pandemic devastated markets in 2020. The $59 billion dedicated for farmers’ relief payments in the "One Big Beautiful Bill" is testament to the fact that the economic future of rural America appears bleak.
The economic challenges our farmers face places even more pressure on the upcoming United States-Mexico-Canada (USMCA) renegotiations. Even though set for next year, Mexico, Canada, and the US are already staking positions and signaling their intentions. Look no further than Mexico contemplating placing tariffs on Chinese imports, a move clearly meant to stay in the good, however fickle, graces of the Trump administration.
Looking out for US farmers, there are some concrete policies that a renegotiated USMCA could feature. Specifically, new labeling requirements to ensure the integrity of domestic markets, as well as price guarantees tied to anti-dumping measures, could improve the economic prospects of producers as they struggle to weather the uncertainty of our ongoing trade war.
The problem is that in the past, the Trump administration took the wrong approach for how to improve the situation of producers when dealing with our neighbors. Concretely, when Trump renegotiated the North American Free Trade Agreement (NAFTA) last time he was in office, besides rebranding it the USMCA, he also sought to open Canadian markets for US dairy exports.
Eking out marginal increases, those gains ultimately made no real improvement in the prices that farmers received. Proof of this is how dairy farmers have consistently struggled to stay in business, as we have witnessed a 25% nationwide decline from 2017 to 2023 in the number of licensed dairy herds. The recent uptick in dairy prices has nothing to do with USMCA, but instead to a reduction in feed costs and farmers cutting down their herds by selling heifers for beef.
Farmers are known for their resiliency. At the same time, they can only take so much.
Failing to finagle improved prices for farmers from changing exports, this time USMCA negotiations should focus on ensuring the integrity of markets.
The first step toward this would be for the US to reinstate Mandatory Country of Origin Labeling (MCOOL). Originally part of the 2002 Farm Bill before being removed after Canada and Mexico put pressure on the World Trade Organization (WTO), this program would make retailers disclose the origins of their products, including milk, dairy, meat, fish, and fruits, and vegetables. As such, MCOOL allows consumers to make informed purchasing decisions and choose our products instead of picking the cheapest goods of dubious quality that may come from abroad.
Such a change would assist ranchers particularly, as since Trump has taken office, Brazilian beef imports flooded US markets. And since the WTO has been paralyzed since Trump’s first term when he chose not to appoint judges to the institution’s appellate court, now MCOOL can return without opposition.
Next, pricing policies could be put in place to assure a decent income for farmers and prevent dumping.
The US has already made one move in this direction, placing a 17% tariff on tomato imports and accusing Mexican growers of dumping, that is, exporting goods into another market at below cost to drive competitors out of business.
Preventing dumping also cuts both ways, as when NAFTA was first introduced, US corn imports drove Mexican farmers out of business, into poverty, and then to cross the border. Accordingly, if Mexico wants to restrict the flow of some commodity south, such as corn, they should be allowed to.
To avoid a tit-for-tat battle, resolving this issue requires setting floor prices in some capacity. Like what they have already done with wages for automobile workers, negotiators could do the same for grains, as well as for livestock. They could also set limits on what comes from outside the trade bloc, like Mexico appears ready to do with China. The same could be done with Brazil and its beef, or perhaps with the many European countries that send billions of dollars of cheese a year into the US. Cheese is a critical element of dairy pricing, and decreasing imports could lead to more US production and better prices for farmers.
Farmers are known for their resiliency. At the same time, they can only take so much. Export-driven growth may sound like a good idea, but the reality has been different. A renegotiated USMCA that actually puts farmers first could turn things around and give producers a fighting chance to make a decent income and stay on the land.
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Why Aren't You Supporting the Trump Tariffs?
Progressives and Democrats need a trade policy that makes sense, resonates with working people, and proves they understand the economy better than a know-nothing President Trump.
Apr 07, 2025
On this question, you can take your pick:
- They will lead to a destructive trade war.
- They will lead to a massive economic depression, like the 1930s.
- They will make prices and unemployment rise at the same time, like in the 1970s.
- They will disappear our savings and pensions as the stock market craters, like in 1929.
- And to save democracy, WE SHOULD NEVER SUPPORT TRUMP ON ANYTHING!
The United Autoworkers (UAW), one of the most progressive unions in the country, isn’t buying any of this. For now, it fully supports the Trump tariffs. As the UAW puts it:
This is a long-overdue shift away from a harmful economic framework that has devastated the working class and driven a race to the bottom across borders in the auto industry. It signals a return to policies that prioritize the workers who build this country—rather than the greed of ruthless corporations.
For more than thirty years, the UAW and other unions and progressives have fought free trade deals like NAFTA, adopted in 1994, which in the succeeding decades have decimated American working-class jobs and communities, especially in the industrial areas of the Midwest.
The argument against free trade was simple: Allowing corporations to flee easily and rapidly to low-wage countries put them in a competitive race to the bottom in pursuit of cheaper wages and less costly working conditions. This was especially true in the better-paid U.S. manufacturing industries. Company negotiators threatened job relocation or reductions in virtually every collective bargaining effort with industrial unions.
Corporations said it again and again: “Accept wage and benefit concessions or we’ll move the plant to Mexico.” For labor unions that was a lose-lose proposition. Take less money and benefits and undercut your standard of living or hold fast and lose your job.
The Democrats, led by President Bill Clinton, put together enough votes to pass the deal, and they have been paying the price ever since. Sherrod Brown, the former U.S. Senator from Ohio, says that what he repeatedly heard in his failed senatorial campaign last year was how the Democrats destroyed jobs via NAFTA.
Allowing corporations to easily relocate abroad has been a key element of the neoliberal march to rising inequality. Free trade involves a trade-off, it was argued. More workers would get jobs in growing export industries than would be lost in manufacturing. And the rise of cheap imports would lower the prices of goods workers bought, effectively giving them a pay raise.
Of course, the reality was that the new non-union working-class jobs pay far less than the unionized ones that were lost, and the working-class knows it. And while cheaper goods from Walmart likely offset some of the material sting, moving down the socio-economic ladder is painful and contrary to the American dream.
After years of railing against this Faustian bargain, progressives are now watching Trump claim he is protecting U.S. industries through massive tariffs. The goal, he sometimes says, is to bring back the jobs that were lost.
Progressive Democrats are stuck with a painful dilemma. If they oppose the tariffs across the board, they will be siding with the financiers and CEOs who have profited wildly from low or no tariffs, and have ushered in runaway inequality and increasing job insecurity. (See Wall Street’s War on Workers.)
But Democrats on the left so detest Trump, that it’s nearly impossible for them to join with the UAW to support the tariffs. Unless a new path is forged, progressives will find themselves in an unholy alliance with the Wall Street neoliberals and against the working-class, sounding the death knell for any kind of progressive-worker alliance to build an alternative to Trumpism.
What is a Progressive Trade Policy?
Sen. Bernie Sanders (I-Vt.) is attacking the Trump tariffs by playing his Vermont card, since the state has extensive economic ties to Canada. His key is focusing on working-class jobs:
Given Vermont’s long-established economic ties with our Canadian neighbor, the impact on our state will be even greater. We need a rational and well-thought-out trade policy, not arbitrary actions from the White House. I will do everything possible to undo the damage that Trump’s tariffs are causing working families in Vermont and across the country.
But just what would a “well-thought-out trade policy” look like?
Boarder Adjustment Tax
The goal of a worker-oriented trade policy is to take wages out of competition. That could be most easily done through a tariff called a border adjustment tax. The tax covers the difference in wages between the low-wage and high-wage workers, something that is easily calculated. If wages are nearly identical there would be no need for a tariff.
Targeted Tariffs
When John Deere and Company announced last year it was moving approximately 1,000 jobs to Mexico, in effect to finance higher CEO pay and stock buybacks for Wall Street investors, Trump threatened to impose a 200 percent tariff on any subsequently imported Deere products from that country. That sent the exact message workers wanted to hear: You move our jobs away to fatten your pockets, you get hammered.
Hard to argue with that proposition, but the Democrats did just that. Instead of dealing with how the job shift to Mexico was being used to finance stock giveaways to Wall Street, they rolled out Mark Cuban, who called the tariffs “insane,” because they would hurt Deere.
What About Countries with High-wage Labor?
Workers in export industries in northern Europe, Canada, and Japan have wages and benefits as high or higher than U.S. workers. What’s the rationale, for example, to put tariffs on German-made cars? One reason would be to equalize tariffs in each country and in the long run move them towards zero. The other is to encourage them to increase production in the US.
Ironically, about 5,600 German corporations already have been moving to the U.S. as they seek access to bigger markets and lower production costs. As many set up in low-wage states in the U.S. South, they avoid the higher labor costs in Germany. Also, they have been taking advantage of lavish subsidies as states compete to attract jobs. Energy is also cheaper in the U.S. and transportation costs are lowered. And finally, Germany makes certain high-quality products, especially in green energy, that aren’t yet produced here.
This suggests that a “well thought-out trade policy,” a la Sanders, with Germany should be the result of negotiations, not unilateral actions.
But Trump doesn’t do “well-thought-out,” which means his tariffs are a colossal mess, perhaps even the product of quickly produced ChatGPT hallucinations.
Yet opposing Trump across the board isn’t a well-thought-out approach either. It leads to the tone-deaf reactions of people like Mark Cuban that protect the status quo and avoid dealing with actual job loss caused by plant relocations to low-wage countries and the impact of such threats on collective bargaining. Which, needless to say, is the real problem.
The UAW is trying to make the distinction between supporting pro-worker tariffs and opposing other anti-worker Trump actions. As UAW president Shawn Fain recently said:
But ending the race to the bottom also means securing union rights for autoworkers everywhere with a strong National Labor Relations Board, a decent retirement with Social Security benefits protected, healthcare for all workers including through Medicare and Medicaid, and dignity on and off the job. The UAW and the working class in general couldn’t care less about party politics; working people expect leaders to work together to deliver results. The UAW has been clear: we will work with any politician, regardless of party, who is willing to reverse decades of working-class people going backwards in the most profitable times in our nation’s history.
For progressive Democrats UAW’s approach will be hard swallow. First, it dilutes the all-out attack on Trump for every action he takes, each of which is viewed as an existential threat to democracy. And secondly, it forces the Democrats to deal with job destruction in the private sector, something they have failed to do for more than a generation.
A better approach would be for left politicians like Sanders to sit down with the UAW to hammer out a common progressive position. Where tariffs protect jobs and remove job relocation from negotiations, they should be supported. Where they kill jobs or simply attack high-wage countries for spite, they should be opposed and replaced by careful negotiations to create a low-tariff level playing field.
Let popular worker support for tariffs teach us that this issue requires problem solving, and support for any tariff should not signal failure on a leftist litmus test. The alternative, pure opposition to tariffs, which is where the entire Democratic Party and the left seems to be headed, is only likely to increase working-class support for MAGA.
Jesus, how did we get into this mess?
Maybe ask the Democrats who didn’t have the guts to challenge Biden’s decision to run again until it was far too late.
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Is Trump Falling Into the Trump Tariff Trap?
The Democrats are once again abdicating the jobs terrain to Trump, hoping instead that his tariff toy will blow up in his dictatorial hands. Instead of calling tariffs “insane,” Democrats should call them job-killing tariffs. And as prices rise, they can blame Trump for that as well.
Mar 13, 2025
Whether by design or instinct, candidate Donald Trump set a perfect trap for the Democrats when, in September 2024, he reacted to the John Deere and Company’s announcement that it would move a thousand jobs from the Midwest to Mexico. Trump said then:
I am just notifying John Deere right now that if you do that, we are putting a 200% tariff on everything that you want to sell into the United States.
Trump saw Deere’s announcement as the perfect opportunity to jump on Deere’s job destruction, which the company used to finance 12.2 billion in stock buybacks to enrich its investors.
The Democrats? They sent billionaire Mark Cuban out to the media to complain that the tariffs were “insane.”
But threatening tariffs did not feel insane to the Deere workers who were about to lose their jobs. Nor did they feel insane to the millions of other workers who had lost their jobs due to “free trade” deals like NAFTA.
The Democrats now have a chance to turn the tables—but, alas, they probably won’t.
The Democrats stumbled into the Trump’s tariff trap and provided many workers with yet another reason to abandon a party that had failed to say anything at all about the needless job destruction caused by overt corporate greed.
After Trump won the presidency last November, I was sure he would set more tariff traps, provoking the Democrats to reflexively react as corporate shills.
But along the way something funny happened. Trump fell into his own tariff trap, and his public support has fallen somewhat. The Democrats now have a chance to turn the tables—but, alas, they probably won’t.
Why Does Trump Love Tariffs?
Even the most ardent MAGA apologist knows that Trump has dictatorial impulses. He wants to play Brando in “The Godfather” and make you an offer you can’t refuse.
But playing Don Corleone in domestic affairs doesn’t come easily. Trump can flood the zone with executive orders, but the courts are still functioning and often enforce the law. Even a pliable Congress has rules which can get in the way of the legislative results Trump is demanding.
But there are two areas where Trump really can act unilaterally—foreign affairs and tariff policy.
As president, Trump is free to bully Ukraine, kiss up to Putin, threaten to annex Greenland, Panama, and even Canada. No one in the U.S. can really stop him. He doesn’t need the blessing of Congress unless he wants a new treaty, which he doesn’t.
Similarly, he can use Section 301 of the Trade Act of 1974, which authorizes the U.S. Trade Representative, a Trump toady, to impose tariffs in response to unfair trade practices, which are not defined.
There is no way a full-scale trade war with Canada will do anything but shatter jobs on both sides of the border, while raising prices as well.
Tariffs are a shiny new toy for Trump to play with. He can turn tariffs on and off, making entire countries jump to his tune. Each day he comes up with new reasons to justify them—fentanyl, immigrants, unfair subsidies, too much control of domestic banking (God forbid!). But these are just excuses for having fun by intimidating entire countries.
Trump can also combine his control of foreign policy with tariffs, as he is gleefully doing with Canada. What fun it is to threaten to take down the Canadian economy with tariffs while bullying them into becoming the 51st state. Clearly Trump wants to flex his dictatorial muscles, even as his real one’s sag with age.
But by playing dictator, he has abdicated the targeted use of tariffs to protect jobs. There is no way a full-scale trade war with Canada will do anything but shatter jobs on both sides of the border, while raising prices as well. Why? Because corporations like John Deere are not fleeing to Canada to find cheaper labor.
As a result, a tariff war with Canada is likely to kiss goodbye as many U.S. jobs as are protected. But Trump doesn’t seem to care because he’s all in on making Canada sweat. Damn the jobs! Damn inflation! He’s simply in love with his unilateral powers, which no one else in the world has. That’s a high that beats fentanyl.
The Trump Trap of Stagflation
Trump may not know it, but he is playing with fire. Tariffs are certain to raise U.S. prices. Why? Because when U.S. corporations see that their competition from Canada faces price increases caused by the 25 percent tariff, the companies will raise their own prices, especially in key industries with only a handful of large competitors.
A tariff war with Canada is likely to kiss goodbye as many U.S. jobs as are protected. But Trump doesn’t seem to care because he’s all in on making Canada sweat. Damn the jobs! Damn inflation! He’s simply in love with his unilateral powers...
Furthermore, by Trump turning his tariff toy on and off, he is causing economic uncertainty. That uncertainty has already had a drastic impact on the stock market.
But it will get much worse if corporations hold back on investment decisions until Trump stops fiddling with his toy.
It’s a very big deal when corporations delay investment decisions. Slower investment rollouts can lead to an economic slowdown and even a recession. And such a downturn can quickly get out of hand, because the Wall Steet derivative games, the kind of which that caused the 2008 crash, are up and running again, bigger than ever.
So, here’s the trap. Tariffs will cause inflation, forcing the Federal Reserve to increase interest rates to combat price increases. And higher interest rates will further reduce economic activity, leading to more unemployment. The Fed then will be unable to boost employment, because that requires decreasing interest rates, which are likely to further fuel inflation.
Bingo, stagflation. I wonder how Trump will feel if morphs into Jimmy Carter?
What Should the Democrats Do?
James Carville is telling the Democrats to do nothing. Play dead and let the guy implode.
But that’s a very dangerous game. Even with all the chaos Trump still has favorability ratings close to 50 percent. His supporters see him taking action, it’s why they voted for him, and they will give him time to make his plans work. Yes, there are protests, but they’re nothing like in Trump’s first term. The danger is, if the Democrats give him uncontested time and space, Trump might find a way to escape from his trap.
Instead, the Democrats should take a page from Trump and put job protection on the top of their agenda. As tariffs bite and cause job destruction, the Democrats should show up and support those laid-off workers. Instead of calling tariffs “insane,” they should call them job-killing tariffs. And as prices rise, they can blame Trump for that as well.
I wonder how Trump will feel if morphs into Jimmy Carter?
More importantly, they should go after any company that receives taxpayer money and is laying off taxpayers. They should slam stock buybacks that enrich Wall Street wealth extractors and CEOs. They should make it perfectly clear that protecting jobs from corporate greed is the number one priority of the Democratic Party.
Will they do this? Dream on.
There is little indication that the Democrats are willing to upset their Wall Street backers by interfering with private sector layoff decisions and stock buybacks. The Democrats are once again abdicating the jobs terrain to Trump, hoping instead that his tariff toy will blow up in his dictatorial hands.
Maybe it will, or maybe working people will see that the Democrats still don’t give a damn about their job security. At least Trump is trying, they may say.
Until the Democrats offer a compelling working-class vision, those living paycheck to paycheck have reasons to stick with Trump who, at the very least, has buried the free-trade mantra that working people know has destroyed so many jobs and damaged their communities.
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