South Dakota’s agricultural community is bracing for significant challenges as new tariffs, announced by the Trump administration, loom on the horizon. With the state’s economy heavily reliant on agriculture, which generated $14.7 billion in cash receipts in 2022 and accounts for 13.9% of its GDP, the proposed 25% tariffs on imports from Mexico and Canada, alongside a 10% tariff on goods from China, are raising alarms among farmers, ranchers, and industry leaders.
The tariffs, temporarily delayed for at least a month as negotiations continue, target South Dakota’s top agricultural export markets. In 2024, the U.S. exported over $30 billion in agricultural products to Mexico, $29 billion to Canada, and $26 billion to China—representing nearly half of all U.S. agricultural exports by value. For South Dakota, Canada and Mexico alone account for over 75% of its agriculture and agri-food exports, including key commodities like beef, pork, soybeans, and corn. The threat of retaliatory tariffs from these nations could severely disrupt this trade flow, echoing the pain felt during the 2018 U.S.-China trade war.
That year, China’s retaliatory tariffs on U.S. soybeans led to a more than 20% drop in prices overnight, costing South Dakota farmers hundreds of millions of dollars. The federal government stepped in with $19.4 million in emergency payments through the Market Facilitation Program, but farmers like Leonard Kopman of Hamlin County described it as a “Band-Aid” that couldn’t fully offset the loss of markets painstakingly built over decades. “We’d rather sell our crops and make a profit than rely on government handouts,” Kopman said at the time. Now, with the specter of new tariffs, similar fears are resurfacing.
Doug Sombke, president of the South Dakota Farmers Union, minced no words about the potential impact. “This is not a good deal for South Dakota farmers and ranchers,” he said. “It’s going to cost us more for machinery parts, fertilizer, and fuel, while Canada and Mexico hit back with tariffs on our exports. It’s a lose-lose situation.” Sombke pointed to the 2018 trade war, where federal payments merely propped up a struggling industry while adding to the national deficit, as a cautionary tale.
South Dakota’s agricultural profile amplifies its vulnerability. Corn, cattle, and soybeans dominate the state’s output, and all are heavily export-dependent. A 2024 study by the National Corn Growers Association warned that renewed tariffs on China could slash U.S. soybean exports by up to 67%—a $15 billion hit nationwide—while corn exports could also plummet. For South Dakota, this could translate to millions in lost revenue, with ripple effects felt in rural communities reliant on farm spending.
Scott VanderWal, president of the South Dakota Farm Bureau, acknowledged the market “jitters” caused by tariff talks but expressed cautious optimism. “We’ve seen this before, and sometimes it’s more noise than action,” he said. “But if retaliatory tariffs hit our commodities, it’ll be tough—especially as we head into spring planting.” VanderWal urged farmers to press congressional delegates for solutions, emphasizing that patience is wearing thin after years of trade volatility.
Beyond exports, the tariffs could raise input costs. Over 80% of the U.S. supply of potash, a critical fertilizer ingredient, comes from Canada. A 25% tariff could drive up production expenses, squeezing already tight margins. Meanwhile, imported machinery parts and fuel—vital for South Dakota’s vast agricultural operations—could become pricier, further straining farm budgets.
Local economists warn of broader consequences. Matthew Elliot, an agribusiness specialist at South Dakota State University, noted that the state’s economy could take a hit far beyond the farm gate. “Lower commodity prices affect farm incomes, state revenues, and the entire rural economy,” he said. “The best-case scenario is a negotiated settlement that keeps trade flowing freely.”
For now, South Dakota’s farmers are left in limbo, securing operating loans and planning for the season amid uncertainty. As Bill Kluck, sheep committee chairman for R-CALF USA, put it, “We need fair trade, but these tariffs could backfire. Our beef, pork, and crops can’t afford to lose these markets.” With the clock ticking, the state’s agricultural backbone hangs in the balance, hoping for a resolution that preserves its economic lifeline.
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