Even as President Donald Trump was tweeting that “tariffs are greatest” this week, his administration was preparing to dole out $12 billion to American farmers to alleviate the negative consequences of tariffs he imposed earlier this year.
This is ludicrous. American farmers wouldn’t need the bailout if the president hadn’t imposed tariffs in the first place.
Since Trump announced tariffs on steel, electronics and other imports to the U.S. from countries including China, Mexico and Canada, these countries have responded with tariffs of their own, which was entirely predictable. Mexico, for example, will impose tariffs of up to 25 percent on agricultural imports from the U.S.
As a result, Mexican buyers of pork will now look to buy it from Europe. Currently, 90 percent of Mexican pork leg and shoulder imports are from the U.S.
“The toll on rural America from escalating trade disputes with critically important trade partners is mounting,” Jim Heimerl, a pig farmer from Johnstown, Ohio, and president of the National Pork Producers Council, told Politico.
After China imposed tariffs on U.S. soybeans, prices for the commodity hit a 10-year low. China is the largest buyer of U.S. soybeans.
“The math is simple. You tax soybean exports at 25 percent, and you have serious damage to U.S. farmers,” John Heisdorffer, a soybean grower from Iowa and president of the American Soybean Association, said in a statement earlier this month. The association had asked the administration to consider alternatives to tariffs to address the trade imbalance with China.
To ameliorate these problems, the Trump administration plans to spend $12 billion to help farmers affected by the tariffs. The money would be used for direct financial assistance, trade promotion and to buy surplus crops and redistribute as part of low-income food assistance, according to news reports.
Maine’s congressional delegation met with federal officials last month to share concerns about a trade war’s impact on the state’s lobstermen, who are also being hurt by Chinese tariffs. This week, the Department of Agriculture declined to include lobstermen in the farmer assistance plan. Rep. Chellie Pingree has cosponsored legislation to ensure that commercial fishermen are included in an assistance plan.
Maine blueberry growers have seen exports to China plummet this year. It is unclear if they will be included in the USDA bailout.
The list of affected industries is sure to grow. Motorcycle maker Harley-Davidson has already moved some U.S. production overseas, and U.S. automakers have been hit by higher steel costs, which they likely will pass on to consumers, thereby depressing sales. The federal government can’t bail out all of them. Instead, Trump would have been wise to listen to his advisers and not unilaterally impose tariffs in the first place.
While farmers appreciate the temporary help, most simply want to grow and sell their crops, at a price that sustains their farm. “I don’t want free money. I don’t want bailouts,” Wanda Patsche, who grows corn and soybeans and raises pigs in southern Minnesota told the Associated Press. “I want trade. Trade is what works.”
Later in Tuesday’s tweet, Trump said: “Remember, we are the ‘piggy bank’ that’s being robbed.” He’s right, but not in the way he thinks.
American taxpayer money — the piggy bank — will ultimately pay for the bailout to help people who have been hurt by a hasty and counterproductive Trump policy.
Of course, it would have been better to avoid the problem in the first place by not starting an unnecessary trade war.
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