The Continuing Impact of Tariffs, Trade Disruptions, and Federal Government Reopening on the U.S. Soybean Sector

The U.S. soybean industry remains a focal point in the intersection of American agriculture, global trade policy, and federal regulatory action. Ongoing trade tensions — particularly between the United States and China — have reshaped the global soybean value chain, while rising input costs, labor constraints, and regulatory uncertainty create additional pressures for farmers. In recent months, attention has turned toward how the reopening of the federal government — after extended funding uncertainty — may influence agricultural markets, regulatory decisions, and the broader operating environment for soybean farmers. The combined effect of trade policy, regulatory backlogs, and supply chain disruptions have created a complex landscape for growers heading into the 2026 planting season.

The U.S.-China trade dispute remains the most significant driver of soybean volatility. China historically purchased more than half of all U.S. soybean exports. Retaliatory tariffs and geopolitical friction have, however, caused dramatic declines. Recent U.S. Department of Agriculture (USDA) data show that U.S. soybean exports to China in 2025 (to date) totaled around 218 million bushels, down from nearly one billion bushels the prior year. Investigative reporting has also raised questions about whether China will meet its announced purchase commitments. Despite high-profile White House claims of pending deals, reporters found little empirical evidence of large-scale Chinese purchases materializing. Attempts by trade officials to secure new buyers — including recent diplomatic missions to Latin America, Africa, and Southeast Asia — have been met with cautious optimism but limited concrete commitments. 

Farmer-facing organizations, including Farm Action, have also argued that trade instability exacerbates existing market concentration and vulnerabilities tied to soybean monoculture. Tariffs have increased the cost of imported fertilizers, chemicals, and machinery parts. This is particularly pronounced in the crop protection market. Simultaneously, CropLife has warned that China’s shifting trade commitments could reshape global crop-protection supply chains, potentially raising costs for U.S. farmers. Labor shortages in agriculture have sharpened due to shifting immigration policy and enforcement. Enforcement-first labor strategies have contributed to supply chain disruptions in food and agriculture, affecting harvesting, processing, and rural labor markets. Soybean farmers, though less labor-dependent than specialty crop growers, still rely heavily on seasonal labor for trucking, grain handling, and logistics. Reduced export demand and increased costs ripple into rural communities, affecting equipment dealers, grain elevators, restaurants, and local tax bases.

Experts have emphasized that prolonged trade instability exposes deeper structural weaknesses in U.S. agriculture. Soybean production has increased in the past 20 years, driven by decades of policy and market consolidation that can magnify vulnerability to export shocks and may leave farmers with fewer alternatives as transportation and marketing systems adapt to the increased national production volumes. Many soy farmers use a corn-soybean rotation (soy helps add natural nitrogen to the corn crop, which has a high nitrogen absorption rate.) Advocacy groups like Farm Action have raised concerns about the potential for increased vulnerabilities, calling for diversification incentives, and antitrust enforcement. A prolonged federal shutdown affects U.S. agriculture more severely than many other sectors. The reopening of the government — whether after a budget lapse or protracted funding delay — has both immediate and long-term impacts on the soybean industry.

Restoration of USDA Market Reporting and Data Integrity

While “critical” government jobs were still operational, much of the work that is key to supporting USDA was stalled or paused. During shutdowns, USDA halts critical functions, including:

• World Agricultural Supply and Demand Estimates (WASDE) reports;

• Export Sales Reporting (ESR);

• Crop Progress reports; and

• Loan and price support operations.

These data products guide global grain markets. Their absence increases price volatility and uncertainty. Upon reopening, USDA plays catch-up, but market participants often operate on stale or incomplete data — especially damaging in periods of already elevated trade uncertainty. Recent news coverage underscores how USDA data gaps have fueled confusion about China’s purchase commitments.

Resumption of Farm Service Agency (FSA) and Risk-Management Operations

The government shutdown impacted services that kept farmer-adjacent services running smoothly, which ultimately hampered soybean production, including: 

• Agriculture Risk Coverage (ARC)/Price Loss Coverage (PLC) and crop-insurance signups;

• Loan processing;

• Conservation program approvals; and

• Disaster aid payments.

The shortfalls in funding to key programs ultimately delayed cash flow for farmers already absorbing export-related price shocks.

Restarting EPA Pesticide, Chemical, and Agricultural Approvals

While the U.S. Environmental Protection Agency (EPA) was not shutdown, key EPA functions were affected. Key EPA services that were impacted include:

• Registration decisions (including herbicides, seed-treatment chemistries, and fumigants);

• Renewable Fuel Standard (RFS) rulemaking;

• Pesticide label updates and enforcement guidance;

• Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) complaint processing; and

• Agricultural worker-protection activities.

EPA’s reopening is especially relevant; delays of even a few months can affect seed-purchasing plans and growers’ herbicide programs for the next planting season. EPA’s Agriculture News & Alerts page has repeatedly warned of program delays and backlog recovery each time a shutdown ends.

Resumption of Trade Diplomacy

While trade diplomacy continued during the government shutdown, many key foreign policy employees worked without support staff or reliable paychecks, and with far fewer resources. The reduced resources allotted to trade diplomacy affected:

• Trade missions;

• Negotiations with China, Mexico, and emerging soybean importers;

• Embassy agricultural attaché reporting; and

• Foreign Agricultural Service (FAS) market development programs.

This is directly relevant to U.S. efforts to secure new soybean buyers.
In the days following reopening, diplomatic engagement typically spikes, as seen in recent U.S. appeals to China to stabilize agricultural relations ahead of high-level meetings.

Reopening of Immigration & Labor Functions

Shutdowns restrict U.S. Department of Labor (DOL) labor-certification processing and U.S. Department of Homeland Security (DHS) immigration workflows, constraining farm labor supply. A reopening allows the release of backlogged H-2A visa certifications and resets enforcement priorities — critical for soybean-adjacent industries like grain transport, storage, and processing.

Policy Outlook for 2026

As the government reopens and agencies work through backlogs, several themes will shape soybean-sector stability:

• Trade diplomacy action remains the central uncertainty;

• Input cost inflation may persist as global crop-chemical markets adjust to China’s procurement signals;

• Calls for diversification and domestic crush expansion are likely to grow louder;

• Labor and immigration policy will increasingly be viewed as agricultural policy, not separate issues; and

• Trade gyrations affect already low crop prices for U.S. producers, which further impacts farmers’ ability to purchase equipment and inputs such as pesticides.

The U.S. soybean sector sits at the nexus of trade, regulatory policy, and global supply chain dynamics. Tariffs and retaliatory measures continue to disrupt export flows, while rising input costs and structural vulnerabilities challenge financial resilience. The reopening of the federal government adds another layer of complexity — restoring critical operations but also revealing how deeply agricultural markets depend on the continuity of federal agencies. As the 2026 season approaches, policymakers, regulators, and industry stakeholders will need to navigate a landscape shaped by trade uncertainty, regulatory backlogs, and evolving global demand. The resilience of American soybean farmers will depend on the effectiveness of these policy responses and the stability of the institutions that support them.