Administration Earmarks Up to $12 Billion for Agriculture to Offset Trade War

Muriel Colon
July 25, 2018

The administration of President Donald Trump will provide up to $12 billion in aid to farmers impacted by retaliatory tariffs imposed by America's trading partners, according to Sonny Perdue, the secretary of the Department of Agriculture.

Agriculture Secretary Sonny Perdue says the plan will help a broad number of farmers deal with the cost of "disruptive markets" as USA trading partners have retaliated for President Donald Trump's tariffs on imported goods.

Of the total unjustified retaliatory tariffs imposed on the United States, a disproportionate amount was targeted directly at American farmers, the Department of Agriculture said.

While Mr. Trump's aggressive trade policies with China have been celebrated by members of both the major political parties, his decision to impose tariffs on steel and aluminum imports from the EU, Canada and Mexico have been met with more skepticism. Either a country which has treated the United States unfairly on trade negotiates a fair deal, or it gets hit with tariffs. It's as simple as that - and everybody's talking! All will be Great!

This will help producers of soy, sorghum, corn, wheat, pork, dairy, fruit, rice and nuts, all products hit by tariffs imposed in response to USA actions. "The programs we are announcing today help ensure our nation's agriculture continues to feed the world and innovate to meet the demand".

The Food Purchase and Distribution Program will buy up surplus fruit, nuts, legumes, rice, pork, and dairy, distributing the products to food banks and nutrition programs.

The plan for providing price supports, which don't need congressional approval, was rolled just two days before Trump is set to travel to Iowa, the top USA soybean-producing state.

The measures are a response to an estimated $11 billion in "trade damage from unjustified retaliation", the agency said.

The plan comes as Trump speaks at the Veterans of Foreign Wars national convention in Kansas City in the heart of the nation's farm country. "But Wisconsin is our home base, and we want to expand and grow here", Clark said.

Federal subsidies for farmers, however, are likely to place congressional Republicans, who typically resist large-scale government assistance programs, in a hard position of supporting the president, a fellow Republican, or distancing themselves. Ben Sasse, a Republican, criticized what he called a bailout, and the administration's underlying trade policy. Ron Johnson (R-Wis.) told reporters on Capitol Hill. "If tariffs punish farmers, the answer is not welfare for farmers - the answer is remove the tariffs".

"I want to know what we're going to say to the automobile manufacturers and the petrochemical manufacturers and all the other people who are being hurt by tariffs", said Sen.

Sen. Charles Grassley (R-IA) said the administration's move was "encouraging for the short term". In addition, the government will work to open new markets.

Why it matters: The aid package could have far-reaching economic consequences and will likely play a role in the elections this fall.

Trade experts expressed hope that the Trump-Juncker meeting could help stave off Trump's plans for a 25 percent USA tariff on imported cars and automotive parts and start a process for us allies to begin reducing automotive tariffs. "And President Trump is the first one to call them on that". Lawmakers from both parties do too and, perhaps more importantly, the US automakers who would be the ostensible beneficiaries of the tariffs have come out against the idea.

'Every time I see a weak politician asking to stop Trade talks or the use of Tariffs to counter unfair Tariffs, I wonder, what can they be thinking?

Joel Schreurs, a soybean farmer from Tyler, Minnesota, said the plan was a "good start" but not a fix that works in the long run.

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