The agricultural industry has always been impacted by various forms of volatility, from geopolitical events to climate shifts. In 2025, however, the landscape faced a new type of uncertainty primarily driven by changes in U.S. trade policy, marking a shift in how such shocks affect global agriculture.

On April 2, President Donald Trump introduced a significant aspect of his economic strategy with a reciprocal tariff scheme, which he termed “Liberation Day.” The ensuing months were fraught with fluctuating announcements regarding tariffs imposed on different countries, creating confusion and speculation across the agricultural supply chain.

Impact of Tariffs and Market Reactions

Economists and market analysts observed anticipation of price surges in agricultural commodities. Producers faced declining commodity prices, compounded by rising costs for crop inputs and machinery. Notably, John Deere reported diminished sales due to escalating steel costs.

Shifting Global Trade Dynamics

As 2025 progressed, global trade alliances began to reshape dramatically. Brazil strengthened its ties with China, leading to a decline in U.S. soybean exports as China pivoted towards Brazilian sources. This shift forced American farmers to weigh the risks of continuing the soybean crop or diversifying their planting strategies.

In November, the U.S. took steps to solidify new trade partnerships with countries like Argentina, Ecuador, El Salvador, and Guatemala, focusing heavily on agricultural provisions. This shift came concurrently with discussions about potential military action in Venezuela, posing more questions than answers for stakeholders in the agricultural sector.

The Future of Trade and Agriculture

In Latin America, the Mercosur trade bloc, which includes Argentina, Brazil, Paraguay, and Uruguay, aimed to finalize a trade agreement with the European Union (EU) after 26 years of negotiations. The objectives of the Mercosur-EU deal revolve around increasing bilateral trade, generating predictable trade regulations, and promoting sustainable development.

However, resistance emerged as leaders from France and Italy expressed apprehensions regarding how the deal would impact their agricultural sectors, leading Brazilian President Lula to state that if the EU failed to sign promptly, future agreements would not be forthcoming during his term.

Upcoming Elections and Their Potential Impact

Looking ahead to 2026, the U.S. mid-term elections could further redefine agricultural policies as the Trump administration grappled with volatility by enacting a $12 billion bailout for farmers, supposedly funded by the controversial tariffs.

In addition, the administration’s commitment of $600 million towards regenerative agriculture indicates a strategic shift in priorities. The upcoming farm bill discussions, set against a Jan. 30 deadline, may add further layers of complexity to the agricultural landscape.

Meanwhile, Brazil’s presidential election on October 4, 2026, with Lula seeking a fourth term, promises to affect the nation’s booming agricultural sector, which plays a crucial role in its economic growth. The recent United Nations Climate Change Conference (COP30) showcased Brazil’s ambitions to leverage agricultural innovation as part of its commitment to tackling the climate crisis.

In summary, 2025 served as a pivotal year for the agricultural sector, with various forces reshaping trade dynamics and agricultural policies across the Americas. Stakeholders are encouraged to remain vigilant and adaptable as these developments unfold.