US weighs farmer bailout as China retaliation threatens exports
China raised tariffs to 84% on US exports
Agriculture Secretary Brooke Rollins said the administration is considering plans to offer assistance to farmers amid worries that the US-China trade war will have a disastrous effect on American agricultural producers.
China announced plans to increase tariffs on all American goods to 84% after President Donald Trump raised duties on Chinese imports to 104%. During a smaller trade fight with Beijing during Trump’s first term, his administration used the Commodity Credit Corporation to offer $28 billion to bail out US farmers. The government-owned and operated entity was created to boost farm income and prices.
“We are looking at that again,” Rollins told Bloomberg News Wednesday at the White House. “Obviously everything is on the table, but we’re in such a period of uncertainty in terms of what this looks like.”
The Agriculture secretary said, however, that no decisions have been made on whether to extend financial assistance to farmers.
“The goal is we won’t need to do it at all, that these changes and the realignment of the economy will result in an unprecedented air of prosperity for all Americans, but especially for our farmers and our ranchers,” Rollins said.
The discussions around a farm bailout indicate the Trump administration is concerned about the potential fallout of the trade war on farmers, a key political constituency for the president and his Republican Party.
The tit-for-tat responses from Washington and Beijing mark a rapid escalation that has unnerved global financial markets and sparked fears of an economic downturn.
The retaliatory tariffs are hitting farmers as other administration policies curb their ability to sell products. The Trump administration has dismantled the US Agency for International Development, whose programs purchased commodities from American producers. Trump has also threatened to scale back nutrition assistance programs that buy US agricultural products.
The risk of an escalated trade war comes as American farmers are struggling to regain their position as the leading exporters of staples from corn to wheat, after Brazil’s successes in seizing market share.
Trump’s tariffs have sent foreign governments racing to cut deals with the administration to avert or ease the levies. Rollins last week announced she would travel to Vietnam, which is looking to secure an agreement with the US, and on Wednesday she said she would visit the UK and Japan “in the next six weeks.”
The White House is also weighing the possibility of creating a tax credit for exporters, who could be hard hit by other nations’ moves to retaliate against Trump’s levies with their own trade barriers.
