Reference News Network, July 26 report - According to the Bloomberg News website on July 24, after years of low agricultural product prices and rising costs, small farmers in the United States are facing a crisis caused by rising interest rates, the trade war initiated by Trump, and a sharp decline in demand from China.
Small farms in distress
This year, the number of small business bankruptcy applications submitted by small farmers and fishermen has reached the highest level since 2020. According to the US Department of Agriculture, farm debt in the US is expected to reach $561.8 billion this year, setting a new record high.
Brett Bruggeman, Chief Operating Officer of Blue Lake Company, one of the largest farmer cooperatives in the US, said: "Our operations have been extremely difficult for the past three years."
In recent years, as China has begun to increase purchases from Latin American countries such as Brazil, US soybean, corn, and pork producers have become the most severely affected groups. Joseph Pfiffner of the Agricultural and Business Law Strategies Law Firm based in Iowa, USA, said that before President Trump's first inauguration in 2017, US farmers dominated the Chinese import market. He pointed out that this position has now been taken over by Brazil.
Pfiffner said, "Once you lose a customer, it's very hard to win them back." Lawyers said that companies specializing in farm debt restructuring have seen a significant increase in business recently.
Blue Lake Company said that its members' cash reserves are continuously decreasing, and concerns about the 2026 planting season are increasing. More and more growers are applying for one of the company's assistance programs, which provides funding support for seeds, fertilizers, and other agricultural inputs.
Although the US Department of Agriculture predicts that farm net income will increase in 2025, this improvement mainly comes from government subsidies. The income from major crops such as corn and soybeans continues to decline. Over the past two years, overall farm income across the country has continued to fall.
Automakers hit hard
According to the Fortune magazine website on July 22, General Motors is the latest American automaker to state that tariffs have significantly cut its profits. The company's second-quarter earnings report released on the 22nd showed that due to high import taxes, the company suffered a loss of $1.1 billion, leading to a sharp drop in profits.
General Motors reported a 2% decrease in sales to $47 billion in the second quarter, with quarterly profits of $1.9 billion, down from $2.9 billion during the same period last year.
Considering the impact of Trump's car tariff policy (which imposes a 25% tariff on imported cars), General Motors withdrew its annual performance forecast for the second quarter, estimating that tariffs could cost the company up to $5 billion in profits. The company announced in June that it plans to invest $4 billion in domestic manufacturing plants to offset the cost increases from import tariffs and boost capacity. However, General Motors' reliance on compact cars produced in South Korea makes it vulnerable to tariffs.
General Motors' competitor Stellantis Group announced on the 21st that due to a sustained decline in North American sales, the company posted a net loss of $2.7 billion in the first half of the year. Stellantis stated that these difficulties were exacerbated by the "early impact of US tariffs," which had a negative impact of over $350 million on the company.
Consumers forced to pay
The tariff impact on automakers has increased concerns - and further proves - that Americans are paying for Trump's comprehensive tariff policy.
George Saravelos, an analyst at Deutsche Bank, stated in a report published on the 21st: "The top-down macroeconomic evidence seems clear: most tariffs are paid by Americans."
Saravelos believes that so far, the US consumer price index has only shown moderate inflation, "which indicates that US importers have largely compressed their own profit margins to absorb the tariffs."
Stellantis and General Motors bearing billions in tariff costs is a typical example of this phenomenon.
"There are only two people who can pay the tariffs: either the shareholders or the consumers," said Daniel Rosca, a senior analyst at Bernstein Research, to Fortune magazine reporters. "In the end, these two groups will share the burden. Therefore, we have always believed, and will continue to believe, that car prices will rise in the second half of the year."
There are already signs that American consumers will be the next group to bear the impact of tariffs. Automakers have started to cancel discount and incentive programs that were introduced months ago to boost sales, such as Ford Motor dropping its employee discount program for potential buyers and instead offering zero-down, zero-interest, or installment payment plans. (Translated by Ma Dan)
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