A bandaid won’t fix the problem
U.S. Trade Rep Robert Lighthizer says President Trump wants to “modernize” America’s trade deals, but this week the Agriculture Department is dusting off an ancient New Deal program to assist farm casualties of his trade policy.
USDA Secretary Sonny Perdue on Monday announced $5.9 billion as the first tranche of $12 billion in aid for farmers stung by retaliatory tariffs imposed by China, Mexico, Canada and the European Union. Big commodity producers such as soybean, pork, dairy and wheat farmers will receive $4.7 billion in direct aid from the Commodity Credit Corporation, a 1930s program whose time has come again. The handouts are intended to mollify farmers in Iowa, Wisconsin and Indiana before the November election.
The Agricultural Marketing Service will also buy $1.2 billion in 30 or so nut, vegetable and fruit crops to distribute through government welfare programs and food pantries. Purchases will supposedly be based on “an economic analysis of the damage” caused by retaliatory tariffs, but members of Congress have been lobbying for farmers in their district.
Oh, and tough luck for fisheries, vintners and producers of maple syrup, mustard, strawberry jam and tomato sauce, which have also been hit with tariffs. They don’t qualify for either program.
Farm income nationwide is at a 12-year low due in part to soaring global production, and Chinese retaliatory tariffs have made U.S. producers less competitive while further dampening prices. Farmers fear that trade partners will begin sourcing supply from elsewhere and won’t reverse course even if trade tensions subside.
A Commerce report on Tuesday showed that food, feed and beverage exports plunged 6.7 percent in July. California farmers last month reported that $2 billion in annual exports had been affected by retaliatory tariffs with almond shipments to China and Hong Kong falling by nearly 50 percent in June. Meantime, taxpayers are getting hit twice — first as consumers by the Trump Administration’s tariffs and then as financiers to mitigate the political damage.
The Wall Street Journal