Facing the brunt of President Trump's trade war with China, which threatens some $34 billion of US products and agriculture with duties, the White House has announced a $12 billion "short-term" stimulus plan to help US farmers hurt by China's "illegal" retaliatory tariffs.
The package, as expected, will consist of direct payments, food purchases and trade development - under a program already authorized under the Commodity Credit Corp act, which means Congressional approval is not required. Further details on the program will come by Labor Day, according to USDA Secretary Sonny Perdue and top officials.
Earlier in the day, Trump told a Veteran's group: "This country is doing better than it's ever done before, economically...It's all working out. Just remember: what you're seeing and what you're reading is not what's happening."
Pres. Trump says "this is the time" for tariffs: "This country is doing better than it's ever done before, economically...It's all working out. Just remember: what you're seeing and what you're reading is not what's happening." https://t.co/RHXmN2iULc pic.twitter.com/DAcUlBvEaW— ABC News (@ABC) July 24, 2018
As we reported earlier, China's retaliation against Trump's tariffs was a lefy on 545 categories of US products, ranging from soybeans, pork, chicken and seafood to sport-utility vehicles and electric vehicles, and as a result of plunging commodity prices, one group emerged as especially hard hit by the administration's tariffs: farmers.
Iowa Senator Joni Ernst appeared on CBS' "Face The Nation" warning that: "farmer ranchers are “always the first to be retaliated against” in these types of “trade negotiations," adding that farmers have been put in “very vulnerable position.”
Meanwhile, Iowa Secretary of Agriculture Mike Naig said that "there are real issues in our trade relationship with China that need to be addressed, but Iowa agriculture cannot continue to bear the brunt of the retaliation from our trading partners."
In short, America's farmers were getting ever more angry with Trump's policies.
"Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports, The math is simple. You tax soybean exports at 25 percent, and you have serious damage to U.S. farmers."
Cheese producers were also hard hit, forced to discount their products to keep customers, with many putting orders put on hold and resulting in the biggest cheese inventory in US history.
"We have seen large drops in our dairy product sales prices at all levels," said Catherine de Ronde, economist for the Agri-Mark Inc. dairy cooperative. "It will create a significant backup of dairy products."
Not everyone is happy with Trump's emergency aid.
Senator Bob Corker (R-TN) slammed the plan in a Tuesday press release, which reads:
WASHINGTON — U.S. Senator Bob Corker (R-Tenn.), chairman of the Senate Foreign Relations Committee, today released the following statement regarding reports that the Trump administration is considering offering $12 billion in farm aid to ease the impact of tariffs recently implemented by the administration.
"I am glad that the administration finally seems to understand that the Trump-Pence tariffs are hurting the American people," said Corker.
"These tariffs are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy. We will continue to push for a binding vote here in Congress to reassert our onstitutional role on national security-designated tariffs."
And responding to earlier reports of Trump's $12 billion stimulus plan, Senator Bob Sasse (R-NE) said that the Trump administration was "going to make it 1929 again."
The Nebraska senator said that Trump's trade war is "cutting the legs out from under farmers," and that the White House will now "spend $12 billion on gold crutches."
"America’s farmers don’t want to be paid to lose – they want to win by feeding the world," Sasse said in a statement. "This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again."
As we noted earlier, under the White House plan, the money will be disbursed in at least three ways, coming through direct assistance, a food purchase and distribution program, and a trade promotion program.
The plan, which has been in the works for months, seeks to ensure U.S. farmers and ranchers — a key constituency for President Donald Trump and Republicans — don’t bear the brunt of an escalating trade fight with China, the European Union and other major economies.
Trump, back in April, directed Agriculture Secretary Sonny Perdue to devise a plan to mitigate any financial damage to U.S. agricultural producers’ bottom lines that could result from the ongoing trade battles. But the administration has so far offered few details on the amount of aid that would be provided and how it would be distributed.
And since subsidies are merely another facet of trade warfare, expect China - which has also revealed similar subsidies to its own exporters - and especially Europe, to respond in kind shortly, as the tit-for-tat global trade war continues.