Tariffs, Trade Remedies, and Fertilizer: How U.S. Policy Is Reshaping Farm Input Costs

Trump’s tariff measures and ITC-backed phosphate duties have driven fertilizer costs higher and altered import patterns, with ripple effects across U.S. agriculture and global supply chains

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Fertilizers have become a critical fault line in the evolving U.S./China trade war and the broader reshuffling of global agricultural supply chains. Under President Trump’s renewed tariff agenda and the U.S. International Trade Commission’s (ITC) ongoing enforcement of duties against key fertilizer exporters, input costs for U.S. farmers have surged, exposing long-standing vulnerabilities in the nation’s reliance on foreign fertilizer supply.

How U.S. regulations, market & cost pressures impacted U.S. fertilizer production

U.S. regulatory, market- and policy-driven factors in the 1970s and 1980s contributed to a decline in U.S. fertilizer production competitiveness, and this in turn helped markets outside the U.S. expand their role in fertilizer manufacturing and exports. Below is a breakdown of which regulations and market conditions played a role, and where production shifted or grew abroad.

While there wasn’t a single regulatory act aimed directly at curtailing U.S. fertilizer production, a combination of regulatory/policy frameworks and associated cost-structures constrained U.S. production in the 1970s-80s. Some of the key mechanisms:

• Energy/natural gas cost pressures: The production of synthetic nitrogen fertilizer (via the Haber–Bosch process) is very natural gas intensive. Natural gas is both the feedstock (hydrogen supply) and a large part of variable cost. The U.S. in that era had regulatory constraints on natural gas (e.g., the Natural Gas Policy Act of 1978) and other energy market pressures that raised the cost of feedstock in the U.S. relative to other regions. 

• Environmental and regulatory cost burdens: Environmental regulation intensified after the 1970s (e.g., through the Clean Water Act, Toxic Substances Control Act of 1976) and these raised compliance costs for chemical/industrial plants, including fertilizer plants. While not all these burdens have been quantified specifically for each fertilizer plant, the broader trend is clear. 

• Declining domestic demand and farm policy shifts: During the 1980s U.S. agriculture experienced low commodity prices, and the government introduced programs (e.g., the Conservation Reserve Program) which removed some farmland from production, reducing fertilizer demand. For example, one study notes that U.S. fertilizer use declined about 22% during the 1980s relative to its 1979-80 peak. 

• Overcapacity and structural rationalization: Because U.S. plants were originally built when demand was higher and natural gas cheaper (post-WWII era), when demand dropped and costs rose, many plants became uncompetitive. According to a review: “Between 1984 and 2008, the number of active ammonia-producing plants in the U.S. dropped from 59 to 22 (a 63% reduction).” 

• Global cost competition/imports: As other countries developed lower-cost natural gas or lower‐cost production capacity (e.g., Canada, Trinidad & Tobago) the U.S. market faced growing import competition. One report notes that by the 1980s-90s Canada, the former Soviet Union, and Trinidad & Tobago had natural gas fields that increased competitiveness of ammonia imports. 

Thus, while regulations and policy did not directly ban U.S. fertilizer production, the combination of regulatory cost burdens, energy/feedstock constraints, lower domestic demand, and rising global competition made U.S. production less competitive — contributing to plant closures, consolidation, and greater import dependence.

Impact: The shift in U.S. relative competitiveness and global market dynamics contributed to expansion of fertilizer production capacity and exports from other regions. Some of the important places:

Canada: Canada has natural gas and access to potash (for potassium) and other raw materials; Canadian production became a major exporter and supplier into North America. For example: Canada and Trinidad & Tobago are the two largest sources of overall U.S. nitrogenous fertilizer imports.

Trinidad & Tobago: The Caribbean island with large natural gas reserves became a major nitrogen (ammonia) production/export hub. One document notes: “The development of natural gas fields in Canada, the former Soviet Union, and Trinidad and Tobago in the 1980s and 1990s increased the competitiveness of ammonia and nitrogen imports.” 

Other emerging regions: Over time, Middle East, North Africa, and other regions (with cheap feedstock, lower labor/operating costs) expanded fertilizer production globally. The global fertilizer markets grew, and world fertilizer consumption nearly doubled from 1970 to the mid-1980s — especially in low-income countries. 

In short: U.S. fertilizer production was undercut during the 1970s-80s by rising energy/feedstock costs, tighter environmental/industrial regulation, and falling domestic demand due to farm policy and commodity price stress. These pressures made U.S. plants less competitive, leading to consolidation and closures. For example: 59 → 22 ammonia plants between 1984-2008. Meanwhile, regions with cheaper feedstock (natural gas), favorable regimes, and export-oriented production built capacity (Canada, Trinidad & Tobago, etc.). The U.S. increasingly relied on imports.

The Tariff Shock of 2025
 

When the Trump administration announced sweeping tariffs in 2025 — including proposals to levy duties on Canadian potash, Chinese nitrogen-based inputs, and European fertilizers — the U.S. agricultural sector immediately felt the strain. Despite partial carve-outs and temporary suspensions, the market impact was clear: fertilizer prices rose between 16% and 39% through the first half of 2025. Canadian potash, which accounts for more than 80% of U.S. potash imports, saw spot prices increase from roughly $303 to $348 per ton. Even short-lived tariff threats injected volatility into planting decisions and elevated risk premiums across the Midwest.

ITC Duties and the Phosphate Crunch
 

In parallel, the ITC’s countervailing duties (CVDs) on phosphate fertilizers from Morocco and Russia, first imposed in 2021, have had an even more durable effect. A peer-reviewed study by agricultural economists found that these duties increased U.S. phosphate fertilizer prices by approximately 34% compared to counterfactual scenarios. Imports from Morocco’s OCP and Russia’s PhosAgro declined sharply, while domestic producers like Mosaic and Nutrien filled the gap — but at higher prices. Corn, cotton, and sorghum producers bore the brunt, with input costs climbing by roughly 10%, while soybeans and wheat saw 1–4% higher costs. Soybeans use less nitrogen fertilizer than most other major crops because they can produce much of their own. Soybeans still need phosphorus (P) and potassium (K) fertilizers for healthy root development, pod filling, and yield.

Import Dependence and Policy Exposure
 

U.S. fertilizer markets are heavily dependent on imports — over 90% of potash, roughly 30% of nitrogen fertilizers, and 10–12% of phosphate products are sourced abroad. The geographic concentration of these imports magnifies risk: Canada and Trinidad supply most nitrogen, while Morocco and Russia historically dominated phosphate. Tariffs and duties have not reduced this dependency; instead, they have often redirected trade flows or tightened domestic supply. USDA’s Fertilizer Production Expansion Program (FPEP) aims to mitigate this exposure by investing up to $900 million in new U.S. production capacity, but such efforts take years to materialize.

Summary of Policy Impacts

Nutrient	Import Share Before Policy	Import Share After / Current	Estimated Price Impact	Estimated Per-Acre Cost Impact
Potash (KCl/MOP)	≈90% imported (80% from Canada)	≈90%+ (83% from Canada)	~$45/ton (+15%)	$9–$14/acre
Phosphates (DAP/MAP)	≈10–12% imported	≈10% (lower diversity)	+34% price increase	$5–$10/acre
Nitrogen (Urea/UAN)	~30% imported	Stable, higher cost risk	Unclear; moderate rise	$2–$8/acre

 

Rise of China’s Fertilizer Power: A Historical and Structural Overview 1. 1970s–1980s: From Fertilizer Scarcity to State Investment BoomDuring the Mao and early Deng eras, fertilizer was considered a strategic input for food self-sufficiency. China faced chronic fertilizer shortages through the 1960s and early 1970s, which constrained grain yields. The government responded by prioritizing massive state-led investment in nitrogen fertilizer plants.“Small nitrogen plants” (xiao chemu chang) were established nationwide, often near coal deposits. These produced ammonia and urea on a small scale using coal gasification rather than natural gas — an advantage, since China’s abundant coal resources insulated it from the energy constraints that plagued U.S. producers.In the late 1970s and early 1980s, Deng Xiaoping’s agricultural modernization campaigns (the “Four Modernizations”) accelerated fertilizer expansion, with fertilizer output becoming one of the earliest state-industrial successes under reform.Between 1978 and 1985, China’s ammonia capacity doubled, and total fertilizer output tripled, turning it from an importer into a largely self-sufficient producer by the mid-1980s. By 1985, China produced roughly 17 million tons of fertilizer annually — up from less than 5 million tons in 1970. 2. 1990s: Modernization and Scaling of Large Industrial Plants  Through the 1990s, China began phasing out small, inefficient plants and building large-scale nitrogen and phosphate facilities.The government introduced foreign joint ventures and technology transfers (notably from Japan and Italy) to build modern ammonia-urea complexes using natural gas and advanced coal gasification.Energy subsidies and low-cost domestic coal gave Chinese producers structural cost advantages over Western competitors.The State Council and National Development and Reform Commission (NDRC) categorized fertilizers as “strategic commodities,” meaning they benefited from preferential lending, power pricing, and export incentives.  As U.S. and European producers shut down due to high energy and compliance costs, China filled the global supply gap — particularly in nitrogen-based fertilizers. 3. 2000s: Export Expansion and Global Market Entry By the early 2000s, China transitioned from near self-sufficiency to a fertilizer export powerhouse, largely in urea and phosphate fertilizers.The “Go Out” strategy under Hu Jintao’s administration encouraged chemical exports, including fertilizers.China became the world’s largest urea exporter by 2008, exporting to Southeast Asia, South Asia, and increasingly to Africa.Low labor costs, abundant coal, and government-controlled energy inputs kept production costs low, while export rebates and currency policies made Chinese fertilizers competitive globally. By 2010, China accounted for roughly 30% of global nitrogen fertilizer output and more than 20% of phosphate fertilizer exports. 4. 2010s–2020s: Consolidation, Environmental Controls, and Strategic Leverage  From 2015 onward, China began tightening environmental standards under Xi Jinping’s “Green Development” agenda. Small, inefficient plants were closed, but the state simultaneously consolidated fertilizer production into large, vertically integrated enterprises like Sinochem, CNAMPGC (China National Agricultural Means of Production Group), and China BlueChemical.  Even with stricter domestic regulations, Chinese firms expanded overseas fertilizer investments — in Africa, Central Asia, and Southeast Asia — through the Belt and Road Initiative (BRI).Chinese firms financed and built urea, phosphate, and potash facilities in countries like Laos, Kazakhstan, and Morocco, locking in supply and export routes.Beijing has used fertilizer exports as a geopolitical tool, managing export quotas to stabilize domestic food prices or exert leverage over trade partners (as seen in 2021–2024 export throttles that spiked global prices).Structural Advantages That Allowed China to Gain GroundFactorChina’s AdvantageU.S./Western Position (1970s–2000s)Energy SourceAbundant domestic coal (and later, LNG)Natural gas price volatility; energy regulationLabor & Compliance CostsLow labor costs, lax early environmental regulationHigh labor and regulatory compliance costsState Policy SupportStrategic commodity; subsidized credit and energyMarket-driven; limited policy protectionCapital AccessState-backed investment & industrial policyPrivate sector retrenchment; plant closuresExport IncentivesVAT rebates, export quotas, targeted subsidiesTariff exposure, declining export competitivenessMarket ExpansionBelt and Road fertilizer projects (Africa, Asia)Decline in international investment Result: A Reshaped Global Fertilizer Map  By the mid-2010s, China was producing roughly one-third of global nitrogen fertilizers, half of global phosphates, and among the top five potash importers/exporters. The U.S., once the global fertilizer leader in the 1950s–60s, had become import-dependent — sourcing nitrogen from Trinidad & Tobago, Canada, and now, indirectly, from China through global trade networks. China’s rise has thus been both a product of industrial policy and a consequence of Western retreat, particularly U.S. regulatory and cost pressures during the late 20th century.

Washington Turns Up the Heat on Fertilizer Prices as DOJ and USDA Launch Joint Probe

With fertilizer costs soaring nearly 37% since 2020, federal agencies and lawmakers are moving to review alleged market concentration, investigate prices, and rebuild domestic production capacity.

The U.S. government is stepping up scrutiny of the fertilizer industry as soaring input costs deepen the financial strain on farmers already caught between a trade war and rising production expenses. In a rare joint effort, the Department of Justice (DOJ) and USDA have launched a coordinated investigation into whether anti-competitive behavior is driving record-high fertilizer prices — now estimated to have surged nearly 37% since 2020.

Announced under a memorandum of understanding signed in late September 2025, the collaboration marks the strongest federal response yet to concerns that fertilizer producers and distributors may be exploiting global trade disruptions to raise prices. The DOJ’s Antitrust Division will lead the probe into possible price manipulation, market concentration, and monopolistic practices within agricultural input markets, including fertilizers, seeds, and equipment.

As noted, the investigation comes as fertilizer supplies remain a critical flashpoint in the U.S./China trade war. China, the world’s dominant exporter of nitrogen, phosphate, and potash fertilizers, has sharply restricted shipments in recent months — a move that has rippled through global markets and driven up U.S. production costs.

According to industry analysts, these export throttles have pushed the cost of producing corn in the United States up by nearly 20% per acre, a massive hit for producers already struggling with narrower profit margins. With input costs rising faster than commodity prices, many growers say they are being “squeezed from both ends.”

Legislative Push: Fertilizer Research Act of 2025

On Capitol Hill, lawmakers from both parties are moving to tackle fertilizer market transparency head-on. Sens. Chuck Grassley (R-Iowa), Joni Ernst (R-Iowa), and Tammy Baldwin (D-Wis.) introduced the Fertilizer Research Act of 2025 (S 2808) in mid-September.

The bill directs USDA’s Economic Research Service to produce a detailed report within one year, analyzing:

• The size and value of the U.S. fertilizer industry over the past 25 years;

• Import levels and the impacts of antidumping or countervailing duties;

• Market concentration and pricing influences; and

• The broader economic impact of fertilizer costs on producers.

The bipartisan measure aims to shed light on a sector that has long operated with limited transparency. Grassley, who has repeatedly criticized price spikes, said the legislation will “bring accountability to an industry where farmers deserve a fair deal.”

USDA Steps Up Domestic Fertilizer Production

Beyond enforcement, USDA has begun channeling major federal investment toward domestic manufacturing. Through its Fertilizer Production Expansion Program (FPEP), the department has earmarked up to $900 million to strengthen American-made fertilizer supply chains. The funding targets new and expanded plants, innovative nutrient technologies, and regional diversification to reduce reliance on imports — particularly from China and Russia.

USDA Secretary Brooke Rollins has framed the initiative as both an economic and national security measure: “When global markets are weaponized, America must ensure our farmers have reliable access to the inputs that feed the world.”

State-Level Efforts Emerging

At the state level, several major farm states — including Iowa, Nebraska, and Minnesota — are exploring their own policy levers, from tax credits for fertilizer manufacturing to grants supporting alternative nutrient technologies. However, only about half of the top agricultural states have mandatory fertilizer regulation or reporting frameworks, underscoring the patchwork nature of state oversight.

The Road Ahead

With DOJ and USDA enforcement underway, congressional oversight intensifying, and state programs expanding, the U.S. fertilizer market faces its most comprehensive review in decades. Analysts say the findings could lead to significant changes — from antitrust actions and transparency mandates to long-term efforts at reshoring fertilizer production.

For U.S. farmers, relief may not come overnight. But as one industry advocate put it, “For the first time in years, Washington is treating fertilizer not just as a cost of doing business, but as a matter of national resilience.”

U.S. Success Story: Manure Becomes Major Player in U.S. Fertilizer Market Amid Price Shifts

Rising fertilizer costs have transformed hog manure from a disposal problem into a critical nitrogen source and profit stream for producers — but questions loom if cheaper domestic production changes the equation.

Once considered a waste byproduct, hog manure has become a vital part of the nitrogen fertilizer mix in much of the Midwest. For years, hog producers either applied it on their own farms or paid others to haul it away. But the steep rise in manufactured fertilizer prices — driven as noted by global supply shocks, tariffs, and export controls — has reshaped the economics. Now, in hog-heavy regions like Iowa, Minnesota, and parts of Illinois, manure is often in high demand.

The shift has created a new revenue stream for pork producers, who can sell or trade manure as a nutrient-rich alternative to synthetic fertilizers. Biggest limitation is transportation so the manure is typically applied within a few miles of the hog production facility. For corn growers, particularly those close to concentrated animal feeding operations (CAFOs), the availability of hog manure has offered a cost-effective and reliable nitrogen source. Some farmers report that, after fall applications of manure, they need little or no supplemental nitrogen during the growing season.

However, the dynamic could change if U.S. fertilizer manufacturing expands and prices ease. A resurgence in domestic fertilizer production — supported by policy incentives or trade shifts — may undercut manure’s relative advantage. The result could affect both the value of manure and the nutrient-management practices that have become central to many Midwest farm operations. But if there is hog production, there is manure. And that must be gotten rid of. It would take a major downdraft in nitrogen prices to get farmers away from hog manure.

The other side of hog manure is that it is not as consistent as manufactured fertilizer as issues like it varies from farm to farm depending on the species of hogs, the nutrient levels of the manure based on animal diets and age, how well manure is agitated or mixed before it is applied to fields, and other aspects. But many farmers using hog manure will have it tested to have a better idea of the nutrient makeup which then dictates application levels, etc.

Researchers and policymakers are watching closely. The question now is whether the recent rise of manure-based fertilizer is a temporary response to high prices or a permanent shift in how U.S. agriculture sources its nitrogen. 
 

Bottom Line: Fertilizer as a Strategic Commodity

The convergence of tariffs, duties, and geopolitical supply disruptions has underscored fertilizer’s transformation from an overlooked farm input into a strategic commodity. Federal agencies are now treating fertilizer supply chains as critical infrastructure — akin to semiconductors and rare earths. As noted, the DOJ and USDA have launched joint investigations into possible price manipulation and market concentration, and Congress is advancing the bipartisan Fertilizer Research Act of 2025 to bring greater transparency to pricing, import dependence, and market structure. Until domestic capacity catches up, however, American farmers will continue to shoulder the cost of global fertilizer politics.