To Ease Pain of Trump’s Trade War: $12 Billion in Aid for Farmers

Source: By By Julie Hirschfeld Davis and Ana Swanson, New York Times • Posted: Wednesday, July 25, 2018

Bruce Edler fills seed planters with soybean seed in Gideon, Mo. The prospect of Chinese retaliation has upended global markets for soybeans and other American farm exports.Shannon Stapleton/Reuters

WASHINGTON — The Trump administration on Tuesday announced up to $12 billion in emergency relief for farmers hurt by the president’s trade war, moving to to insulate food producers from looming financial losses that would be a direct result of President Trump’s policies.

The aid to farmers, announced by the United States Department of Agriculture, will come through a direct assistance program, one designed to help with food purchase and distribution and one specifically geared toward promoting trade.

The move is an indication that Mr. Trump — ignoring the concerns of farmers, their representatives in Congress, and even some of his own aides about the adverse consequences of a trade war he says he relishes — plans to plow forward in escalating his tariff tit-for-tat around the world.

“The actions today are a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in,” Sonny Perdue, the secretary of agriculture, said during a call with reporters to unveil the program. “This administration will not stand by while our hard-working agricultural producers bear the brunt of unfriendly and illegal tariffs.”

The approach could cost American producers billions of dollars and potentially inflict political pain on Republicans in farm states who would be forced to answer for the policies of a president who has shown little regard for the consequences of his trade agenda.

The European Union, Canada, Mexico, China and other countries have responded to Mr. Trump’s tariffs on steel, aluminum and $34 billion worth of Chinese products by imposing taxes of their own. They have often chosen to target farm country, the source of some of America’s biggest exports and an important political base for the president.

American soybeans, pork, sugar, orange juice, cherries and other products now face tariffs in foreign markets that make their products less desirable.

Mr. Trump and his advisers have argued that while American producers may feel short-term pain from his protectionist stance, ultimately they will benefit from it as other countries lower their barriers to American products.

In the meantime, the administration has sought ways for the Agriculture Department to help farmers survive the pain of retaliation. As part of the program announced on Tuesday, the department will draw on the financial resources of a program known as the Commodity Credit Corporation, which helps shore up American farmers by buying their crops.

The initiative, which does not authorize any new money and thus not need approval from Congress, was a way for Mr. Trump to tamp down criticism of his trade policies. But it was also an unmistakable signal that the president has no plans to lift his tariffs any time soon, as Farm Belt senators have pleaded.

The plan, first reported by The Washington Post, was met with swift condemnation from Republicans and trade groups, who said that Mr. Trump had devised an expensive and clunky solution to a crisis of Depression-era proportions.

“This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches,” said Senator Ben Sasse, Republican of Nebraska. “This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

One trade group leader said farmers need contracts, not aid, for stability.

“The best relief for the president’s trade war would be ending the trade war,” said Brian Kuehl, the executive director of trade group Farmers for Free Trade, adding,This proposed action would only be a short-term attempt at masking the long-term damage caused by tariffs.

Farm groups say their members have already suffered under lower global commodity prices and natural disasters. The prospect of retaliation has further upended global markets for soybeans, meat and other American farm exports, and farmers are warning that tariffs are costing them valuable foreign contracts that took years to win.

The White House has argued that the tariffs are a negotiating strategy that will allow the president to secure better trade deals, and that the pain the tariffs is inflicting is small in comparison to the potential economic gains.

In an interview on CNBC last week, Peter Navarro, a White House trade adviser, said that the amount of trade being affected by the tariffs was a “rounding error” compared to the vast size of the Chinese and American economies. “My point is that it’s much less disruptive than these headlines would suggest,” he said.

Senator Joni Ernst, Republican of Iowa, noted that more than 456,000 jobs are supported by trade in her state alone.

“These new tariffs are threatening $977 million in state exports,” Ms. Ernst said. “That is no ‘rounding error.’ Those are real people — Iowans — who are waiting for terms to be negotiated, for new deals to be finalized.”

Jim Tankersley contributed reporting.