Making Uncertainty a Trade Policy

Changes to international trade policy carry a risk for businesses, especially farms dependent on exports. New rules are often challenged or delayed as economists and politicians debate policy. At the Iowa Farm Bureau 2026 Economic Forum in Des Moines, several speakers explained how that uncertainty has a cost.

Agriculture seeks trade certainty

Former U.S. Trade Representative Bob Lighthizer said, “For agriculture, what we need is consistent certainty of market access, right? That's what we need. And then, obviously, consistency on inputs.”

Agriculture depends on international market access. The U.S. is especially good at specialized food production, and some countries need imports to feed their people. While the U.S. historically imports more goods than it exports, agriculture had been net positive on trade for decades.

However, since 2019 it has consistently run an ag trade deficit according to data from the USDA Foreign Agricultural Service. For some policymakers, this deficit demonstrates a need to change trade policy.

Lighthizer said, “We do not live in a time of scarcity. And nobody, no community, no family, no country that gets richer consumes more than they produce.”

RELATED: This Midwest farmer had trade on her mind when she flew to Washington, D.C.

Competing Trade Philosophies

How to deal with a trade deficit can illicit two different primary philosophies: reduce imports or increase exports. The policies intended to erase the deficit are much more debatable. One example would be whether to use tariffs, like President Donald Trump has attempted to do with greater frequency in his second term.

Samuel Gregg, President and Friedrich Hayek Chair in Economics and Economic History at American Institute for Economic Research, said recent Trump’s tariff policies were a change from nearly 70 years of policy.

“We see this emergence of a type of consensus of ideas across the political spectrum about the free trade and trade liberalization being better for the United States than tariffs,” Gregg said. 

Gregg said policymakers believed free trade had more than just economic benefits. They thought it could support geopolitical goals and national interests as well. However, there was a massive reversal in 2016 with the first Trump administration.

Trump tariffs

Lighthizer said reducing consumption to fix the deficit is not politically acceptable. “So, what you have to do is massively increase production and slightly increase consumption,” he said.

Uncertainty as Policy

John Crespi, director of the Center for Agricultural and Rural Development, said uncertainty discourages investment, slows economic growth, and, in severe cases, could cause an industry recession.

“You don't do anything, because you don't want to take that chance,” Crespi said. “Just saying, ‘I'm just not going to do anything, which means I'm not going to invest. Because I don't know. Do I buy that combine next year, or am I going to be growing something entirely different?’ That's what uncertainty brings into an economic situation.”

Trade policy with China

Uncertainty in trade policy can vary according to Gregg, especially by country. He gave the example of Trump’s trade war with China, which had unknown consequences and benefits. However, even having good access to China includes risk. 

“If you're an American business, and you're operating in China today, rule of law is not secure,” Gregg said. “Property rights are not secure. If you get into a dispute with your Chinese business partner…and you end up in front of a Chinese court, it's pretty clear that the court is not going to rule in your favor.”

Economic Policy Uncertainty Index

Susan Stroud, CEO of No Bull Agriculture, said the Economic Policy Uncertainty Index –which measures future government policies and how they affect the economy -- showed an unprecedented amount of uncertainty over the last year and a half. 

“You have not only Russia and Ukraine. We have a trade war, plus a real war in the Middle East,” Stroud said. “With the tremendous escalation again in the Black Sea, it’s creating a lot of uncertainty still.”

One spike in the Uncertainty Index was the announcements of the Liberation Day tariffs, a sweeping series of increased tariffs that Trump announced in April 2025 without working with Congress. The U.S. Supreme Court eventually struck down Trump’s actions.

Altogether, Stroud said the takeaway is clear. “Uncertainty is really no longer a temporary disruption. It’s really part of not only the policy environment, but just the overall environment today,” he said.

RELATED: This could be a new source of income for farmers in one state.