The US Department of Agriculture (USDA) has announced the first wave of financial assistance for the country’s farmers affected by the escalating trade war.
The emergency plan, which consists of a “three-pronged approach,” will initially include about $6 billion in aid. According to the Trump administration, the initial aid will consist of about $4.7 billion in payments to agricultural producers of seven commodities. The federal government will also buy up to $1.2 billion in certain “commodities unfairly targeted by unjustified retaliation.”
A third part of the aid will consist of up to $200 million in spending to help develop foreign markets for US agricultural products.
Since taking office in 2017, President Trump has been pressuring US trading partners to agree new terms on trade deals more favorable to the US by imposing tariffs on foreign imports. Countries have retaliated with levies on American goods, particularly agriculture, because they target Trump’s political support base in the US.
Trump, who has described US tariffs on foreign goods as “the greatest,” said farmers would be the “biggest beneficiary” of the disputes after the US and its partners strike new trade deals.
The largest portion of the assistance – $3.6 billion worth – will go to the US soybean farmers who have been hit hard by Chinese retaliatory tariffs. Some $290 million will go to pork producers, about $277 million for cotton growers and $156 million for grain sorghum, as well as $127 million for dairy, $119 million for wheat and $96 million for corn.
“We always knew that agriculture would be the tip of the spear if other nations decided to retaliate,” USDA Secretary Sonny Perdue told reporters. “We also knew the economic pressure was already there for farmers, even without these unfair trade tariffs.”
According to Perdue, farmer payments under the government relief plan “will be bifurcated so that we can monitor and factor in events.” Perdue said: “An announcement about further payments will be made in the coming months, if warranted.”
USDA data showed that farm income has fallen about 50 percent since 2013 and is forecast to decline 6.7 percent this year, the lowest level in nominal terms since 2006.
“The additional burden of tariffs on the goods we sell to China, Canada, Mexico and the European Union has been more than many farmers can bear,” said American Farm Bureau Federation President Zippy Duvall. “Today’s aid announcement gives us some breathing room, but it will keep many of us going only a few months more. The real solution to this trade war is to take a tough stance at the negotiating table and quickly find a resolution with our trading partners.”