The Trump administration is already considering bailing out farmers caught in the middle of the White House’s escalating trade war that’s now encompassing the rest of the world.
The administration is weighing a new batch of emergency aid to farmers as trading partners push back against U.S. tariffs with their own measures, The New York Times has reported. The last time Trump was in office, his administration spent $23 billion in subsidy payments to farmers to protect them from his trade war then with China, which purchased far fewer American agricultural products.
Such payments, as they did then, would now shield a vital voting base for Republicans.
China imposed retaliatory tariffs on soybeans, corn, wheat, and other imports in 2018, which resulted in the billions of dollars in aid to farmers. The money came from the U.S. Department of Agriculture, which has a fund to partially deal with emergencies such as disagreements over trade.
Agriculture Secretary Brooke Rollins noted last week that the administration may offer emergency aid to farmers, saying that Trump had requested that she have “some programs in place that would potentially mitigate any economic catastrophes that could happen” amid a trade war.
Rollins said Monday during a visit to Iowa that she couldn’t specify how much money the USDA might need to send to “make farmers whole.”
But “if necessary, we are ensuring that we are set up, we have the infrastructure ready” to send assistance to farmers, she said, adding that relief will depend “on what the president announces.”
On Wednesday, as Trump announced sweeping tariffs on all imports, including a 10 percent tariff on all countries, the president said: “With today’s actions, we’re also standing up for our great farmers and ranchers who are brutalized by nations all over the world.”
Trump also announced that trading partners such as China, Japan, and Europe will face tariffs two to three times higher as the last time he was in office, and are far more widespread. That means aid to farmers may cost much more this time around. In addition, the possible retaliatory measures from trading partners may lead to more extreme, and longer-lasting, consequences.
Churning out subsidies to farmers is a dramatic reversal from Trump’s previous position on tariffs, when he told farmers in a social media post early last month to “have fun“ selling more products to the American market, as the result of the tariffs on imports.
“Get ready to start making a lot of agricultural product to be sold INSIDE of the United States,” he wrote.
Four people familiar with the discussions about farmer subsidies told The Times that administration officials have spoken to lobbying groups and Republicans in Congress about what a possible farmer bailout could look like. They told the newspaper that some mechanisms for doling out money to farmers may require legislation.
The payout would also come as the Trump administration is cutting federal jobs for tens of thousands of other Americans, causing financial hardship for them.
Trump’s new tariffs are expected to hit farmers particularly hard as China has already retaliated with levies on corn, wheat, chicken, and cotton. The European Union, meanwhile, has put together a long list of agricultural and consumer products that it may target. Foreign nations are a massive market for American farm products.
The president of the Corn Board of the National Corn Growers Association, Illinois farmer Kenneth Hartman, told The Times that there are concerns about a long trade war leading to U.S. producers losing market share to competitors abroad. A worse outcome includes retaliatory tariffs from longtime trading partners such as Mexico.
“That’s probably our biggest concern right now,” Hartman told The Times.
USDA economists estimate that Trump’s last tariff policies, beginning in 2018, led to a $27 billion loss of agricultural exports. Large parts of those losses came as part of the trade war with China. Some market relationships were permanently altered.
The administration could offer farmers funding via the USDA’s Commodity Credit Corporation, which supplies the funding for federal programs to back up the incomes of farms, stabilize prices, and respond to natural disasters, according to The Times. The agency can borrow as much as $30 billion from the Treasury Department.
