Trump to Offer U.S. Farmers Billions to Ease Trade Pain

The Trump administration was set to announce billions of dollars in aid for U.S. farmers on Tuesday to help protect them from the repercussions of trade spats between the United States and China, the European Union and others, a source familiar with the plan told Reuters.

Rural, agricultural states have been particularly hard hit by U.S. President Donald Trump’s trade policies, and the majority of voters in those states backed him in the 2016 election.

Trump has been talking for weeks about finding ways to aid farmers as China, in particular, has canceled orders for soybeans and other crops.

He defended his trade policy on Twitter on Tuesday.

“Tariffs are the greatest!,” he wrote. “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!” he wrote on Twitter.

In April, the president called farmers “great patriots. They understand that they’re doing this for the country.”

Trump is scheduled to speak in Kansas City, Missouri, on Tuesday, and later in the week will visit Iowa and Illinois, two other agricultural states .

The Washington Post earlier reported that the White House was readying $12 billion in assistance, citing two people familiar with the plan.

Politico, citing two sources familiar with the plan, also reported the administration will pay for billions in trade-related aid through the U.S. Department of Agriculture’s broad authority and two commodity support programs in a farm bill under consideration in Congress.

The USDA did not immediately comment.

Proposing federal subsidies for farmers is likely to place congressional Republicans, who typically resist large-scale government assistance programs, in a difficult position. Some were quick to denounce the proposal.

“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 Senator Ben Sasse, a Nebraska Republican who frequently criticizes the president, a fellow Republican.

“Tariffs are taxes that punish American consumers and producers,” Kentucky Republican Senator Rand Paul wrote on Twitter. “If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs.”

Democratic U.S. Representative Jackie Speier of California, a major agricultural state, challenged the president on Twitter. “OK @POTUS – you created this mess with your trade war and now you are going to spend $12 billion to placate the farmers that voted for you,” she tweeted.

Shares of farm-related companies rose following reports of the financial assistance, which raised the prospect that farmers will have more to spend on tractors and other farm gear.

Deere & Co rose 4 percent in late morning trading, while Caterpillar Inc and AGCO Corp were up nearly 2 percent ahead of the expected announcement.

Soybean futures also rose as traders bet farm aid would improve demand, reducing a current surplus supply.

Farmers have been a particular target in the current clash over trade policy as other countries seek to retaliate for Trump’s duties on Chinese goods as well as on steel and aluminum imports from the European Union, Canada and Mexico. Those affected economies have in turn targeted U.S. agricultural products, including soybeans, dairy, meat, produce and liquor.

Some manufacturers will view the subsidies to farmers as “frustrating,” according to a representative of a manufacturing coalition working on trade issues, speaking on condition of anonymity pending the official announcement.

Manufacturers – particularly any who use steel or aluminum – have also been hit hard by the effects of Trump’s decision to levy tariffs on the two metals.

Farmers for Free Trade, an agricultural-industry advocacy group, also criticized the administration’s proposal.

“The best relief for the president’s trade war would be ending the trade war. Farmers need contracts, not compensation, so they can create stability and plan for the future,” said the group’s executive director, Brian Kuehl. “This proposed action would only be a short-term attempt at masking the long-term damage caused by tariffs.” (Reporting by Ginger Gibson, Susan Heavey, Roberta Rampton, David Shepardson and Mark Weinraub Writing by Susan Heavey and James Oliphant Editing by Tim Ahmann, Marguerita Choy and Frances Kerry)

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