In a tweet, Trump vows new aid to farmers amid low prices, trade worries
WASHINGTON — President Donald Trump for the first time on Friday vowed to continue his multibillion-dollar bailout of the farm industry, casting aside recent comments from senior officials that the program was no longer necessary because of trade deals trumpeted by the White House.
In an all-caps tweet, Mr. Trump pledged to further increase the size of the bailout program that has already cost taxpayers $28 billion. “IF OUR FORMALLY TARGETED FARMERS NEED ADDITIONAL AID UNTIL SUCH TIME AS THE TRADE DEALS WITH MEXICO, CANADA, CHINA AND OTHERS FULLY KICK IN, THAT AID WILL BE PROVIDED BY THE FEDERALGOVERNMENT,” Mr. Trump said.
His comments appeared to surprise a number of administration officials and come amid growing signs that last month’s partial trade deal with China is falling far short of the levels initially promised by the White House. On Thursday, a senior U.S. Department of Agriculture official said China might end up buying just $14 billion in U.S. farm products through the end of September, meaning the total amount of sales for the year was likely to fall far short of the $40 billion Mr. Trump had promised.
Mr. Trump’s political support among many farmers appears to be strong, but White House officials have long been worried about a backlash if prices remain low and bankruptcies continue. Democrats have been encouraged by electoral inroads they made during the 2018 midterm elections when they defeated numerous Republican candidates in farm districts.
The USDA said Thursday that total farm debt was expected to breach $425 billion this year, an all-time high. In 2019, there were 595 Chapter 12 family farm bankruptcies in the U.S., almost 100 more than were filed in 2018.
There has not been a bump in commodity prices since Mr. Trump signed the China trade deal or a separate pact with Canada and Mexico. Mr. Trump had recently promised a huge farming renaissance, telling farmers to buy a “bigger tractor” and more land.
“We are frustrated with the situation. We understand the broader trade implications, but feel we have been targeted in a bigger political battle we did not sign up for,” said Jamie Beyer, a soybean farmer in Wheaton, Minn., and president of the Minnesota Soybean Association. “We are all very excited about the USMCA and the trade deal with China. But we are all waiting for that to be reflected in commodity prices and orders . ... It’s disheartening.”
A third multibillion-dollar bailout could cast a shadow over Mr. Trump’s boasts about the “big, beautiful” trade deal he reached with China last month, an agreement expected to form a key part of his 2020 re-election message on the economy. The outbreak of the coronavirus has wreaked havoc on the
Chinese economy, making it more difficult to forecast how many farm purchases China will make this year.
The farm bailout program began in 2018 as a way to address fury from farmers who alleged Chinese tariffs on their exports had pushed many to the brink of collapse. The program continued in 2019, but White House officials had suggested it would not be renewed in 2020 until Mr. Trump reversed course Friday.
“Farmers are no dummies. They’ve seen this get rolled out the past two years, programs invented out of whole cloth,” said Robert Johnson, president of the National Farmers Union. “The president is going to do whatever he can to appease the farmers because it’s an election year.”
The political stakes for the president are enormous amid growing economic pain for America’s farmers under his administration. Trade wars, weather disasters and low commodity prices have created a farm environment that has dramatically increased bankruptcies.
The need for what would amount to a third round of bailout funding highlights the immense challenges Mr. Trump has faced in his international trade war. In his second year in office, Mr. Trump imposed tariffs on a range of Chinese imports, including steel, as a way to ramp up pressure on the Chinese government to boost U.S. imports. But China retaliated by targeting agricultural producers in the politically critically Midwestern states.
Mr. Trump has repeatedly said the bailout would be paid for by the tariffs imposed on foreign nations, a claim rejected by multiple nonpartisan and conservative budget experts. Tariffs are paid by U.S. importers and then often passed along to consumers in the form of higher prices.