Trump plans emergency aid to farmers affected by his tariffs

A grain salesman shows locally grown soybeans in Ohio
A grain salesman shows locally grown soybeans in Ohio

25 July, 2018

Trump is also set to meet Wednesday with European Commission President Jean-Claude Juncker.

Two days before President Trump is to face farmers in Iowa, the administration announced on Tuesday it would spend up to $12 billion, with the largest share going to row crop and livestock producers, to offset the impact of the tit-for-tat tariff war facing USA exports.

Such a move comes after farmers across the country especially those of products like soybeans and apple have complained that the retaliatory tariffs have hit them very badly.

The U.S. Department of Agriculture (USDA) is offering $12 billion to assist farmers hurt by retaliatory tariffs, the agency announced Tuesday, noting that it is a "short-term" plan.

Trump has in recent months engaged in a multifront trade confrontation, imposing steep tariffs on steel, aluminum and tens of billions of dollars in Chinese goods, which sparked swift retaliation against key U.S. farm products like soy and pork.

After Trump announced plans to impose $50 billion in tariffs on Chinese imports, Beijing retaliated with plans to impose tariffs on a range of agricultural products from the United States including soybeans, grains, meats and dairy products. China has retaliated on soybeans and pork, affecting Midwest farmers in a region of the country that supported the president in his 2016 campaign.

In Pennsylvania, where 59,000 farms have a $137.5 billion economic impact, the tariffs have taken a toll.

US President Donald Trump made the announcement on Tuesday, two days before visiting the state of Iowa - the nation's top soybean producing state.

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Trump did not specifically reference the plan during a speech to veterans in Kansas City, but asked for patience as he attempts to renegotiate trade agreements that he said have hurt American workers. Most of the companies and business groups that have filed comments are seeking to have goods spared from duties on grounds the tariffs are ultimately a tax on consumers and hamstrings them with their global supply chains.

House Speaker Paul Ryan Ryan offered Tuesday that he doesn't think "tariffs are the right answer".

The plan, however, has already magnified objections among some Republicans that the tariffs amount to taxes on American consumers. Furthermore, we are more than 18 months removed from USA withdraw from the Trans Pacific Partnership (TPP).

Sen. Ben Sasse, R-Neb., said the plan would spend billions on "gold crutches".

The aid funding may also mean that Trump's trade war will be going on for some time.

Cramer testified before the U.S. Trade Representative's office during a public hearing Tuesday, where he welcomed "strong defensive actions" against China's "unfair trade practices" that he argued previous administrations have failed to curtail. The imposition of punishing tariffs on imported goods has been a favoured tactic by Trump, but it has prompted US trading partners to retaliate, creating risks for the economy. "If tariffs punish farmers, the answer is not welfare for farmers - the answer is remove the tariffs".

"This is becoming more and more like a Soviet-type of economy here", Johnson reportedly said, with "commissars" providing benefits.

Trump had previously directed Agriculture Secretary Sonny Perdue to explore options to mitigate financial losses United States farmers are suffering as trade tensions between the USA and other countries heat up.

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