Escalating trade tensions and retaliatory tariffs are poised to disrupt global agricultural markets, with significant implications for grain trade, food security, and economic stability, according to a new analysis by the International Food Policy Research Institute (IFPRI). According to IFPRI’s modeling, the new tariffs could contract global agricultural trade by 3.3% to 4.7%, with severe consequences for grain supply chains and price stability.
The imposition of new "reciprocal tariffs" by the United States is disrupting global agricultural trade, shaking grain markets, and raising concerns over food security—particularly in developing and import-dependent nations. A new analysis authored by Joseph Glauber, David Laborde, and Will Martin of the International Food Policy Research Institute (IFPRI) outlines the far-reaching consequences of these protectionist measures and warns that retaliatory responses could further undermine global trade and food system resilience.
On April 2, U.S. President Donald Trump announced sweeping supplemental tariffs on imports from nearly all major trading partners, branding the date “Liberation Day.” These new measures follow years of escalating trade tensions and mark a significant shift toward unilateral, deficit-based tariff policies—without accounting for broader macroeconomic dynamics.
Agricultural trade is especially vulnerable. According to IFPRI’s modeling, the new tariffs could slash global agricultural trade by 3.3% in a no-retaliation scenario and by 4.7% if other nations respond in kind. The IFPRI analysis projects a global GDP decline of 0.3% to 0.4% due to the tariffs, with the U.S. economy bearing the brunt, facing a GDP drop of 1.0% to 1.2%. The agricultural sector, a cornerstone of global trade, will see significant losses, particularly for U.S. farmers. “While the current situation presents significant opportunities for emerging agricultural exporters, it also likely marks a permanent loss of market share for the U.S., especially in key markets such as China,” the authors state.
The study draws parallels to historical trade disruptions, citing the U.S. Smoot-Hawley tariffs of the 1930s, which triggered retaliatory measures and deepened the Great Depression. “Such measures contributed to the contraction in global trade and exacerbated the economic hardships,” the authors reference, quoting economic historian Douglas Irwin.
GRAIN SUPPLY CHAINS IN TURMOIL
Grain markets stand at the crossroads of international development, trade, and food security. Tariff-driven disruptions not only affect grain flows and prices but also weaken the ability of countries—especially in the Global South—to manage food access and affordability. The analysis reveals that countries like Brazil and Argentina may find new export opportunities as U.S. products become less competitive. However, this shift comes at the cost of global market efficiency and long-term stability. In the short term, U.S. farmers are expected to face significant losses due to declining exports and supply chain reconfigurations.
Meanwhile, retaliatory tariffs, particularly from China, are hitting sensitive segments of the U.S. agri-food sector. For example, U.S. oilseed exports—once a major trade flow to China—are projected to decline by a staggering 8%. China is already pivoting to Brazilian suppliers. Other categories like meats and dairy, processed foods, coffee, and tea also face contraction of more than 5% under the retaliation scenario.
WHO WILL BE MOST VULNERABLE?
The fallout from reciprocal tariffs is not evenly distributed. Many developing countries, especially in Sub-Saharan Africa, are facing disproportionately high tariff rates—even though their trade with the U.S. is minimal. For instance, Lesotho, Madagascar, and Mauritius are now subject to U.S. tariffs as high as 50%, 47%, and 40%, respectively, despite accounting for less than 1.5% of total U.S. agricultural imports. In these countries—where urban households spend a large portion of their income on food—higher food prices triggered by global trade shifts could exacerbate existing food insecurity.
A CALL FOR CAUTION
The new tariffs are designed to address the U.S. trade deficit, using a formula that sets rates based on bilateral trade imbalances. However, as IFPRI notes, these measures ignore key structural drivers like currency valuation and comparative advantage. Canada and Mexico, under the USMCA agreement, are largely spared from the new tariffs—though non-compliant goods face up to 25% duties. Meanwhile, many strategic inputs like pharmaceuticals, semiconductors, and certain energy products remain exempt, highlighting the inconsistency of the approach.
The IFPRI researchers urge policymakers to consider the long-term consequences of protectionist measures. “The new tariffs put in place by the Trump administration will likely have disruptive effects on the global economy,” they conclude, emphasizing the need for cooperative trade policies to safeguard food security and economic stability.