The U.S. ag trade deficit climbed to a new high the first half of 2025.
The deficit hit a record $28.6 billion through June, according to USDA data released this month.
Ag exports through June totaled $85.6 billion with imports totaling $114.1 billion, a deficit of nearly $29 billion compared to last year’s trade deficit of $18.4 billion during the same period.
Weak production growth, increased demand for imported food and ongoing trade conflicts are major drivers of the increasing ag trade deficit. In June alone, the value of U.S. ag exports trailed imports by $4.1 billion — a gap that’s 14% wider than a year ago.
President Donald Trump’s reciprocal tariffs announced in April were prompted by the “large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes perpetuated by other countries,” Trump said at the time.
The administration has negotiated a handful of trade deals since April, most recently pausing reciprocal tariffs on China as the two key trading partners continue trade discussions.
The trade war has cut exports from the U.S. to China in half, with U.S. Commerce Department data showing the U.S. exported just $5.5 billion to China the first half of 2025 versus $11.8 billion last year.
The drop came as Trump hiked tariffs on Chinese goods to more than 100% earlier in the year, and China responded by imposing equally high tariffs on American goods.
In June alone, ag exports to China were the lowest since 2010, with no soybeans at all. And as of July 24, U.S. soybean exporters had sold just more than 3 million metric tons of soybeans for export in 2025-26, which begins Sept. 1. That volume is a 20-year low for the date and is down 12% from last year. New-crop sales are struggling because China has yet to buy a single cargo, and this is China’s latest start in the U.S. bean market since 2005, according to Zaner Ag Hedge’s Karen Braun.
In examining the trade deficit, it’s important to understand the U.S. imports products to ensure year-round access to fresh produce and goods not widely grown domestically. Coffee, for example, is almost entirely imported, since production is limited in Hawaii and Puerto Rico.
While some seasonal producers face competition from imports, many imported goods do not directly compete with U.S. crops or are made using U.S.-grown ingredients, according to the American Farm Bureau Federation. In other cases, imports complement domestic production. Oranges are a good example. Most oranges consumed in the winter and spring are grown in the United States, but during the off-season, imports help meet consumer demand and keep shelves stocked.
In fiscal year 2025, which runs through Sept. 30, USDA projects that horticultural products, including fruits, vegetables, nuts, wine and other alcohols, will account for approximately 49% of total agricultural imports by value.
“Strong U.S. demand for high-value, consumer-ready products, many of which are not widely produced domestically, has driven up import values, while a large share of U.S. exports remain lower-value bulk commodities, contributing to the growing trade imbalance,” according to a June AFBF Market Intel.
A strong U.S. dollar and high labor costs have made American goods more expensive for foreign buyers, weakening global competitiveness. At the same time, trade barriers, retaliatory tariffs and ongoing disputes have limited access to important markets.
After decades of consistent trade surpluses, U.S. agriculture has been in an agricultural trade deficit since 2022. In FY 2023, the trade gap reached $16.7 billion and nearly doubled in FY 2024 to $31.8 billion. USDA now forecasts the FY 2025 deficit will rise to approximately $49.5 billion, which would mark the largest agricultural trade imbalance on record. The next quarterly trade outlook is scheduled for release on Aug. 28.