As America's trade fight with China escalates, the Trump administration is planning to provide even more assistance to farmers whose bottom lines have been affected by the increases in foreign tariffs.
Last year, the federal government ended up paying farmers $12 billion to cover the loss of foreign sales to tariff increases, and this year it's looking like the aid package is going to be $15 billion.
"We're gonna take the highest year, the biggest purchase that China has ever made with our farmers, which is about $15 billion," Trump told reporters at the White House on Monday, "and do something reciprocal to our farmers so our farmers can do well, they'll be planting, they'll be able to sell for less and make the same kind of money until such a time as it's all straightened out."
President Trump says his administration plans to provide about $15 billion in aid to help U.S. farmers cope with th… https://t.co/KPwxKqi2Mu— Reuters Top News (@Reuters Top News)1557834600.0
The move comes after Trump faced considerable pushback from Senate Republicans whose state agricultural economies were hit by slumping foreign sales, the Washington Post reported.
In a Monday news release, Senate Agriculture Appropriations Committee Chairman John Hoeven (R-S.D.) praised the president's idea and noted that the assistance would take the form of "Market Facilitation Program" payments and other agricultural assistance.
"We appreciate the Administration's recognition of the challenges in farm country and their commitment to provide agriculture assistance. As chairman of the Agriculture Appropriations Committee, I've been making the case to the Administration, both at USDA and the White House, that our producers need another round of MFP as well as other ag assistance," the statement says. "At the same time, supporting our agriculture industry will send a clear message to China that the U.S. is going to do what it takes to get better trade deals."
While agricultural commodities across the board have been hit hard by the standoff between Washington and Beijing, one of the hardest-hit crops is soybeans, which fell to record low prices on Monday amid a massive supply glut and stalled Asian purchases.
And that supply glut is hitting the president right in his geographic base of support, as several of the states with the highest soybean acreages are states that voted for him in 2016, as shown by the map below.
Trade war has driven soybean prices to 12-year lows -- and most of that pain falls on Trump country (… https://t.co/ockBxM3JPu— Joshua Green (@Joshua Green)1557761965.0
"We've been understanding during this negotiation process, but we cannot withstand another year in which our most important foreign market continues to slip away and soybean prices are 20 to 25 percent, or even more, below pre-tariff levels," John Heisdorffer, American Soybean Association chairman and Iowa soy farmer, said Monday. "Our patience is waning, our finances are suffering, and the stress from months of living with the consequences of these tariffs is mounting."
Early Tuesday morning, the president tweeted, "Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now," adding that the funding for the new subsidies would be paid for by the "massive Tariffs" currently leveled against China and others. "The Farmers have been 'forgotten' for many years. Their time is now!"
Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now. Hopefully China will d… https://t.co/2f0AZLqJHA— Donald J. Trump (@Donald J. Trump)1557833375.0
....This money will come from the massive Tariffs being paid to the United States for allowing China, and others, t… https://t.co/JXdv6JwMIo— Donald J. Trump (@Donald J. Trump)1557833375.0
This latest chapter of the trade standoff with China began earlier this month when Beijing reportedly tried to renege on several portions of a trade deal draft that took months to negotiate.
"When things are unfavourable to us, no matter how you ask, we will not take any step back. Do not even think about it," a recent comment from Chinese state media said at the time.