US admits damage by trade war, to give $12-B aid to farmers

Shipping containers are loaded with soybeans at a Ruff Bros. Grain elevator on June 13, 2018, in Blackstone, Illinois. The US government on Tuesday announced $12 billion in aid for farmers who have been the primary targets of retaliation. AFP

WASHINGTON, United States – In the first acknowledgment by President Donald Trump’s administration that his aggressive trade actions are hurting Americans, the government on Tuesday announced $12 billion in aid for farmers who have been the primary targets of retaliation.

Farm products have borne the brunt of tariffs imposed by trading partners angered by US trade actions, and Agriculture Secretary Sonny Perdue said the aid program will provide relief.

The program will “assist farmers in response to trade damage caused by illegal retaliatory tariffs,” which USDA estimated at $11 billion, Perdue told reporters.

He said this was a “short-term” solution to help farmers and give President Donald Trump time to negotiate a longer term trade deal to help agriculture and other sectors hurt by unfair trading practices by China and others.

The response to the announcement was mixed, with many legislators criticizing the plan, calling it “welfare for farmers,” and farm groups pleading for a more lasting solution.

Trump has in recent months engaged in a multifront trade confrontation, imposing steep tariffs on steel, aluminum and tens of billions of dollars in Chinese goods, which sparked swift retaliation against key US farm products like soy and pork.

He defended his aggressive stance again on Tuesday, saying it was bringing other governments to the negotiating table. European Commission President Jean-Claude Juncker is due to meet with Trump on Wednesday after the US threatened to impose tariffs on auto imports.

“We are confronting unfair trade deals and we are doing it like nobody has ever done, because our workers have been cheated and our companies have been cheated,” Trump told a veterans group in Kansas.

And in a pre-dawn tweet, he said, “Tariffs are the greatest! 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 every body’s talking! Remember, we are the ‘piggy bank’ that’s being robbed.”

US won’t ‘cave in’

Under the three USDA aid programs, farmers will either receive direct payments or sell their excess production to the government to be used for food banks and other food aid, Perdue said. In addition, the government will work to open new markets.

This will help producers of soy, sorghum, corn, wheat, pork, dairy, fruit, rice and nuts, all products hit by tariffs imposed in response to US actions.

USDA officials told reporters they were still working to set up the programs, which they expect to be ready by early September.

The actions “are a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in,” Perdue said.

“The correct action from other nations would be to stop their bad behavior not to retaliate with illegal tariffs.”

China, the EU, Canada and Mexico have all filed disputes against the United States in the World Trade Organization, which could authorize the retaliation if it decides the tariffs imposed by Washington were unjustified of violated global trade rules.

American Farm Bureau Federation President Zippy Duvall welcomed the aid, saying it “should help many of our farmers and ranchers weather the rough road ahead and assist in their dealings with their financial institutions.”

However, National Farmers Union President Roger Johnson said farm families’ “livelihoods are on the line with every tweet, threat or tariff action that comes from the White House.”

He said “prices for farm products are plunging from already very low levels,” and called for a support program to mitigate the damage “for years to come.”

Republican Senator Ben Sasse, a frequent Trump critic, said the president’s trade policies recalled a past of perilous economic instability.

“This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again,” he said in a statement.

And Senator Ron Johnson warned that “no one wins a trade war.” /cbb