The Trump administration has issued a statement that it might extend $12 billion in emergency aid to help farmers amid the President's escalating trade disputes, which have hit the agricultural sector quite hard. Agriculture Secretary Sonny Perdue stated that the US government will provide incremental payments to support prices of commodities that have been hit the most which include soybeans, sorghum, cotton, corn, wheat, and pork. The program will be funded by the Commodity Credit Corporation which was created after the Great Depression and helps farmers with decreasing prices by buying up their crops.
Some criticize the aid program as sheer political opportunism, as it was unveiled two days before the president was scheduled to visit Iowa, a politically important state and a pillar of American agriculture as the nation's top soybean producer. The subsidies will prove to farmers that President Trump supports them and is working to insulate them from the consequences of his trade war. Polls show that farming communities still remain supportive of Trump. Right after the aid was announced, President Trump tweeted, "Tariffs are the greatest! 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! Remember, we are the 'piggy bank' that's being robbed. All will be Great!" Trump also said that Americans should "just be a little patient" with the pain that they may currently be experiencing but that his actions are ultimately forcing other countries to negotiate: "They don't want to have those tariffs put on them - they're all coming to see us - and the farmers will be the biggest beneficiary. We're opening up markets. You watch what's going to happen."
The fact that the Department of Agriculture is willing to set aside relief money is an indication that Trump plans to extend his tariff wars. Perdue told reporters that the subsidies are "a short-term solution that will give President Trump and his administration time to work on long-term trade deals." He also said that this is a response to US trading partners' "illegal retaliation" to Mr. Trump's policies. Allies such as Canada, Mexico and the EU are retaliating. China, in particular, has applied tariffs on $34 billion worth of U.S. goods. China is a huge market for US agricultural exports.
Is there an end to this tariff war? Study estimates show that corn, wheat, and soybean farmers in the US have already lost $13 billion, which is considerably more than what the administration is proposing to provide in terms of relief. These tariffs could possibly cost valuable foreign contracts that took many years to win. Senator Bob Corker, Republican of Tennessee, has criticized the policy stating that, "You have a terrible policy that sends farmers to the poorhouse, and then you put them on welfare, and we borrow the money from other countries. It's hard to believe there isn't an outright revolt right now in Congress."
Earlier this year, the Trump administration imposed 10% tariffs on aluminum imports and 25% on steel imports from Canada, Mexico, and the EU. They also levied tariffs on $34 billion in imports of electronic goods and other products from China. Mr. Trump has also asked his team to study applying tariffs on all vehicles which enter the US to possibly set tariffs on those as well, which could be worth another $200 billion. The administration has acknowledged the financial hardship that farmers will face as a result, but have stated that they will share in the benefits of new trade policies that will serve US interests more.