The U.S. Department of Agriculture (USDA) has announced a short-term $12 billion aid package to help American farmers who have been hurt by retaliatory tariffs.
President Donald Trump directed Agriculture Secretary Sonny Perdue to prepare for options to deal with retaliatory tariffs months ago, before the trade war heated up between the U.S. and multiple countries, including China, Mexico, Canada and the European Union.
The aid package will target soybean, corn, wheat, dairy and pork producers, among others. The USDA said it will use the following programs to assist farmers:
- The Market Facilitation Program, authorized under The Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency (FSA), will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs. This support will help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.
- A Food Purchase and Distribution Program through the Agricultural Marketing Service to purchase unexpected surplus of affected commodities such as fruit, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs
- A Trade Promotion Program administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to assist in developing new export markets for our farm products
“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Perdue said in a USDA press release. “The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes to illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”
Trade tensions, Trump tweet
Trade tensions between the U.S. and China heated up in April, and disputes between the U.S. and its allies Canada, Mexico and the European Union have also escalated in recent months.
In April, China imposed a 179 percent tariff on U.S. sorghum imports and, in May, reports said China had stopped buying U.S. soybeans. In June, the U.S. said it would impose a 25 percent tariff on $50 billion worth of Chinese exports, and China retaliated with tariffs on U.S. products, including soybeans, corn and wheat.
Mexico responded to U.S. tariffs on steel and aluminum imports in June with tariffs on American farm products, including pork, cheese, apples, potatoes, whiskey and cranberries.
On Tuesday, Trump tweeted: “Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs.”
However, Farmers for Free Trade responded: “Most farmers in Trump country don’t think tariffs are ‘the greatest.’ Crops don’t grow overnight. Farmers and producers need time and long-term certainty to do their jobs, not constant chaos created by haphazard trade policy. Despite what President Trump tweets, his harmful trade policies are hurting farmers and families across the country.”
Response to aid program
Lawmakers and agriculture groups responded to Tuesday’s announcement about the aid package. Even Republican lawmakers were against the move, but some ag groups said they were grateful for the aid while they hoped for a positive outcome on trade disputes.
“Our farmers have been in nonstop, saying they want trade, not aid, and now they’re being put on welfare,” said Sen. Bob Corker (R-Tenn.). “So the tariff policies that have been put in place by the administration are now causing them to invoke a welfare policy for our farmers which I’m sure is not what they wish. So pressure is continuing to build. We’re getting more and more complaints I know the administration is also and hopefully soon this ill-thought-out policy will end.”
Sen. Ben Sasse (R-Neb.) said: “America’s farmers don’t want to be paid to lose — they want to win by feeding the world. This administration’s tariffs and bailouts aren’t going to make America great again — they’re just going to make it 1929 again.”
The American Soybean Association (ASA) said it has advised the White House that the best way to reduce the country’s trade deficit is to increase imports and that, while it wants to see the president’s policies succeed, America’s farmers cannot survive long-term trade disputes.
“Since the Administration has decided to use tariffs to address trade concerns with China, and China has retaliated, farmers don’t have time to wait to see how this trade war turns out,” ASA said in a statement. “U.S. soybean producers want to see President Trump succeed in meeting his trade campaign goals of achieving better trade deals and greater market access. And, we appreciate that he has recognized our loss in exports and lower prices and provided some immediate relief. However, producers cannot weather sustained trade disruptions.”
Likewise, the American Farm Bureau Federation (AFBF) said it welcomes the temporary relief but, in the long term, is hopes for restored trade.
“The $12 billion package of agricultural assistance announced today by the administration will provide a welcome measure of temporary relief to our farmers and ranchers who are experiencing the financial effects of the trade war,” the AFBF said in a statement. “This should help many of our farmers and ranchers weather the rough road ahead and assist in their dealings with their financial institutions. We are grateful for the administration’s recognition that farmers and ranchers needed positive news now and this will buy us some time. This announcement is substantial, but we cannot overstate the dire consequences that farmers and ranchers are facing in relation to lost export markets. Our emphasis continues to be on trade and restoring markets, and we will continue to push for a swift and sure end to the trade war and the tariffs impacting American agriculture.”
The National Pork Producers Council (NPPC) thanked the president for the relief, but also stressed its desire for restored trade.
“President Trump has said he has the back of U.S. farmers and today demonstrated this commitment with an aid package to sustain American agriculture cutoff from critical export markets as his administration works to realign U.S. global trade policy,” NPPC said in a statement. “U.S. pork, which began the year in expansion mode to capitalize on unprecedented global demand, now faces punitive tariffs on 40 percent of its exports. The restrictions we face in critical markets such as Mexico and China – our top two export markets by volume last year – have placed American pig farmers and their families in dire financial straits. We thank the president for taking immediate action."
“While we recognize the complexities of resetting U.S. trade policy, we hope that U.S. pork will soon regain the chance to compete on a level playing field in markets around the globe. We have established valuable international trading relationships that have helped offset the U.S. trade deficit and fueled America’s rural economy.”