United States may give farmers more aid until trade deals 'kick in'

Daniel Fowler
February 25, 2020

In an all-caps tweet on Friday, Trump said that "IF OUR FORMALLY TARGETED FARMERS NEED ADDITIONAL AID UNTIL SUCH TIME AS THE TRADE DEALS WITH CHINA, MEXICO, CANADA AND OTHERS FULLY KICK IN, PAID FOR OUT OF THE MASSIVE TARIFF MONEY COMING INTO THE USA!"

China on Friday suspended more punitive tariffs on imports of US industrial goods in response to a truce in its trade war with Washington that threatened global economic growth.

The Trump administration responded by authorizing two massive aid payment programs to farmers - direct payments from the government created to compensate for lost sales overseas. Debbie Stabenow (D-Mich.), who has complained that the program is providing more funds to southern states that voted for Trump and favoring large and foreign agriculture companies over small farms.

Ted McKinney, US Department of Agriculture undersecretary, later said the department had not expected Trump's comment. "He will make that decision".

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He did not say how much money, or how long it would last. In January, administration officials said that the newly signed "phase one" of the trade deal with China would result in $40 billion to $50 billion in agricultural exports per year, but government economists now say they expect to see $14 billion in sales to China through the end of the fiscal year in September - a shorter time frame, but one that suggests that overall sales will lag significantly. The farm rescue is more than twice as expensive as the 2009 bailout of Detroit's Big Three automakers, which cost taxpayers $12 billion.

Trump is seeking re-election in the November 3 presidential election.

Under the deal, which took effect this month, China pledged to increase US goods purchases by US$77 billion in 2020 and by US$123 billion by 2021, compared with a baseline of US imports from 2017, the year before the US-China tariff war began. China directed companies to halt purchases of US farm goods. More than half of US farmers plan to spend less on capital equipment this year, and only 13% plan to spend more, according to a survey conducted by the American Farm Bureau Federation, the nation's largest general farm organization.

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