To Ease Pain of Trump’s Trade War: $12 Billion in Aid for Farmers

WASHINGTON — The Trump administration announced on Tuesday that it would provide up to $12 billion in emergency relief for farmers hurt by the president’s trade war, moving to blunt the financial damage to U.S. agriculture and the political fallout for Republicans as the consequences of President Donald Trump’s protectionist policies roll through the economy.

Unveiled two days before the president is scheduled to visit Iowa, a politically important state that is the nation’s top soybean producer, the farm aid appeared calculated to show that Trump cares about farmers and is working to protect them from the worst consequences of his trade war.

But the relief money, announced by the Department of Agriculture, was also an indication that Trump — ignoring the concerns of farmers, their representatives in Congress and even some of his own aides — plans to extend his tit-for-tat tariff wars.

“The actions today are a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in,” Sonny Perdue, the secretary of agriculture, said during a call with reporters to unveil the program.

The move drew swift condemnation from many farm groups and lawmakers, including several in his own party, who worry about a cascade of unintended consequences that may be just beginning. One farm-group study estimates that corn, wheat and soybean farmers in the United States have already lost more — $13 billion — than the administration is proposing to provide as a result of the trade war. The prospect of retaliation has upended global markets for soybeans, meat and other U.S. farm exports, and farmers are warning that tariffs are costing them valuable foreign contracts that took years to win.

“You have a terrible policy that sends farmers to the poorhouse, and then you put them on welfare, and we borrow the money from other countries,” Sen. Bob Corker, R-Tenn., told reporters on Capitol Hill. “It’s hard to believe there isn’t an outright revolt right now in Congress.”

Sen. Lisa Murkowski, R-Alaska, asked how the president could single out farmers for help when the manufacturing and energy industries also stand to lose in the trade war.

“Where do you draw the line?” Murkowski asked reporters.

Trump could be forced to prop up other domestic industries as retaliatory taxes imposed by trading partners begin to sting automobile manufacturers, distillers and other impacted sectors. Republicans who cherish their party’s reputation as the bastion of free markets and fiscal responsibility wondered aloud on Tuesday about the president picking winners and losers in a trade war he is bent on waging.

“The U.S. Department of Agriculture is trying to put a band-aid on a self-inflicted wound,” Sen. Patrick J. Toomey, R-Pa., wrote on Twitter. “This bailout compounds bad policy with more bad policy.”

Farmers have borne the brunt of Trump’s decision to impose tariffs, which is already costing U.S. producers billions of dollars and threatens to inflict political pain on Republicans in farm states in the midterm elections in November.

“Tariffs are the greatest!” Trump declared on Twitter Tuesday morning. “Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that — and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!”

The European Union, Canada, Mexico, China and other countries have responded to Trump’s tariffs on steel, aluminum and $34 billion worth of Chinese products by imposing taxes of their own. They have often targeted farm country, the source of some of America’s biggest exports and an important political base for the president. U.S. soybeans, pork, sugar, orange juice, cherries and other products now face tariffs in foreign markets that make their products less desirable.

At a speech in Kansas City on Tuesday, Trump said Americans should “just be a little patient” with the pain they may be feeling from the trade war, arguing that his actions were forcing other countries to the negotiating table to cut deals that would be better for them in the long run.

Some farm groups praised the move, albeit as a short-term solution.

“We are grateful for the administration’s recognition that farmers and ranchers needed positive news now, and this will buy us some time,” said Zippy Duvall, president of the American Farm Bureau Federation. “This announcement is substantial, but we cannot overstate the dire consequences that farmers and ranchers are facing.”

But lawmakers in both parties and many agricultural trade groups criticized the assistance program as a taxpayer-funded bailout for farmers imperiled by the president’s own policies, and even Trump’s Republican allies made clear that they did not regard it as a genuine solution to the problems his tariffs had created.

“The president’s announcement of billions of dollars in aid that will be made available to struggling farmers later this year is encouraging for the short term,” Sen. Charles E. Grassley, R-Iowa, said in a statement. “What farmers in Iowa and throughout rural America need in the long term are markets and opportunity, not government handouts.”

Agriculture Department officials said farmers could begin signing up to receive the federal money in September, just weeks before voters go to the polls.

The package includes direct payments to the producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs, who would be compensated according to the size of their harvests this year. It will also include government purchases of surplus products — including fruit, nuts, rice, legumes, beef, pork and dairy — that would be sent to food banks or other nutrition programs. Some of the funding would go to a program in which the Agriculture Department works with private companies to develop new export markets for U.S. farm products.

Trump and his advisers have argued that while U.S. producers may feel short-term pain, ultimately they will benefit as other countries are forced to lower their barriers to U.S. products. Meantime, the administration has sought ways to help farmers survive the pain of retaliation. The program announced on Tuesday will be funded by the Commodity Credit Corp., which helps shore up U.S. farmers by buying their crops.

It marked the first time that funding from the program — created after the Great Depression — has been used to compensate farmers for losses sustained because of trade, according to an Agriculture Department spokesman.

The initiative, which does not authorize any new money and thus does not need approval from Congress, was an unmistakable signal that the president has no plans to lift his tariffs any time soon, as Farm Belt senators have pleaded with him to do.

“This trade war is cutting the legs out from under farmers, and the White House’s ‘plan’ is to spend $12 billion on gold crutches,” said Sen. Ben Sasse, R-Neb. “This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

Sen. Ron Johnson, R-Wis., said farmers in his state “want trade, not aid.”

“I support President Trump’s call for reciprocal trade and his effort to stop China’s theft of American intellectual property, but we should stop self-inflicting permanent damage to America’s economy through tariffs and a trade war,” Johnson said.

One trade group leader said farmers need contracts, not government assistance, for stability.

“The best relief for the president’s trade war would be ending the trade war,” said Brian Kuehl, executive director of the trade group Farmers for Free Trade.

Administration officials argued on Tuesday that the assistance for farmers would help them absorb the pain while persuading other countries that they must offer concessions to forge trade agreements with the United States.

“What this will do is provide some hope to farmers and ranchers that the president and the secretary do have their back,” Greg Ibach, the undersecretary of agriculture for marketing and regulatory programs, said of the aid package.

But many farmers criticized the decision and said it would only compound the maze of federal subsidies and regulations they already must wade through.

“We don’t want to be dependent on another government program,” Casey Guernsey, a Missouri farmer and spokesman for Americans for Farmers & Families, an anti-tariff group, said Tuesday. “We already are very much in a situation in farming, in agriculture across the board, where we are held hostage to decisions made in Washington.” And some lawmakers argued that if he wanted to help American farmers, Trump must simply call off his trade war.

“Tariffs are taxes that punish American consumers and producers,” Sen. Rand Paul, R-Ky., said on Twitter. “If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs.”