The U.S. government says that it will give $16 billion in additional aid to farmers who have been hurt by President Donald Trump's tariffs, the Wall Street Journal reported.
What's the background?
In March 2018, Trump announced steep tariffs on imports of steel and aluminum to the United States. This triggered a series of retaliatory tariffs by China, which were met with additional tariffs by the U.S.
China was a huge buyer of U.S. agricultural products, including sorghum and soybeans. U.S. exports to China in the first three months of 2019 decreased by $17.1 billion compared to the same time period in 2018.
Without the lucrative Chinese market, some U.S. exporters were forced to sell their soybeans to Iran at a discount. While the U.S. has imposed strict sanctions on Iran, agricultural products like soybeans are exempt.
In July 2018, the Trump administration announced that it would be giving $12 billion in emergency aid to farmers who were hurt by these tariffs.
What happened now?
"Farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe," USDA Secretary Sonny Perdue said on Thursday.
While the U.S. and China have made some indication that they want to reach a permanent trade agreement, they have been unable to come up with a deal so far. According to the Wall Street Journal, Chinese purchases of soybeans during the 12-month period ending on May 31 fell by more than 75 percent.
The Wall Street Journal reported that applicants for this aid will be limited to $500,000 each, with farmers who earned $900,000 or more between 2014 and 2016 — before the tariffs took effect or Trump took office — banned from the bailout.
In addition to soybean farmers, hog, dairy, and cranberry farmers will also be among those eligible for this aid.