Frost covers the ground of a harvested corn field on the Couser Cattle Co. family farm in Nevada, Iowa, in 2016. (Barrett Emke/Bloomberg, file)

Frost covers the ground of a harvested corn field on the Couser Cattle Co. family farm in Nevada, Iowa, in 2016. (Barrett Emke/Bloomberg, file)

Billions to help farmers hurt by Trump tariffs

The administration is worried the tariffs will cost the GOP House and Senate seats in the Midwest.

Associated Press

WASHINGTON — The Trump administration announced Tuesday it will provide $12 billion in emergency relief to ease the pain of American farmers slammed by President Donald Trump’s escalating trade disputes with China and other countries.

However, some farm-state Republicans quickly dismissed the plan, declaring that farmers want markets for their crops, not payoffs for lost sales and lower prices.

The Agriculture Department said it would tap an existing program to provide billions in direct payments to farmers and ranchers hurt by foreign retaliation to Trump’s tariffs.

With congressional elections coming soon, the government action underscored administration concern about damage to U.S. farmers from Trump’s trade tariffs and the potential for losing House and Senate seats in the Midwest and elsewhere.

The administration said the program was just temporary.

“This is a short-term solution that will give President Trump and his administration the time to work on long-term trade deals,” said Agriculture Secretary Sonny Perdue as administration officials argued that the plan was not a “bailout” of the nation’s farmers.

But that provided little solace to rank-and-file Republicans, who said the tariffs are simply taxes and warned the action would open a Pandora’s box for other sectors of the economy.

“I want to know what we’re going to say to the automobile manufacturers and the petrochemical manufacturers and all the other people who are being hurt by tariffs,” said Sen. John Kennedy, R-La. “You’ve got to treat everybody the same.”

Sen. Ben Sasse, R-Neb., said the plan would spend billions on “gold crutches,” adding, “America’s farmers don’t want to be paid to lose — they want to win by feeding the world. This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

The program is expected to start taking effect around Labor Day. Officials said the direct payments could help producers of soybeans, which have been hit hard by retaliation to the Trump tariffs, along with sorghum, corn, wheat, cotton, dairy and farmers raising hogs.

The food purchased from farmers would include some types of fruits, nuts, rice, legumes, dairy products, beef and pork, officials said.

Trump did not specifically reference the plan during a speech to veterans in Kansas City, but asked for patience as he attempts to renegotiate trade agreements that he said have hurt American workers.

“We’re making tremendous progress. They’re all coming. They don’t want to have those tariffs put on them,” Trump told the Veterans of Foreign Wars national convention. “We’re opening up markets. You watch what’s going to happen. Just be a little patient.”

Agriculture officials said they would not need congressional approval and the money would come through the Commodity Credit Corporation, a wing of the department that addresses agricultural prices.

The officials said payments couldn’t be calculated until after harvests come in. Brad Karmen, the USDA’s assistant deputy administrator for farm programs, noted that the wheat harvest is already in, so wheat farmers could get payments sooner than other growers.

Soybeans are likely to be the largest sector affected by the programs. Soybean prices have plunged 18 percent in the past two months.

Trump declared earlier Tuesday that “Tariffs are the greatest!” and threatened to impose additional penalties on U.S. trading partners as he prepared for negotiations with European officials at the White House.

Tariffs are taxes on imports. They are meant to protect domestic businesses and put foreign competitors at a disadvantage. But the taxes also exact a toll on U.S. businesses and consumers, which pay more for imported products.

The Trump administration has slapped tariffs on $34 billion in Chinese goods in a dispute over Beijing’s high-tech industrial policies. China has retaliated with duties on soybeans and pork, affecting Midwest farmers in a region of the country that supported the president in his 2016 campaign.

Trump has threatened to place penalty taxes on up to $500 billion in products imported from China, a move that would dramatically ratchet up the stakes in the trade dispute involving the globe’s biggest economies.

The moves have been unsettling to lawmakers with districts dependent upon manufacturers and farmers affected by the retaliatory tariffs.

Sen. Jerry Moran, R-Kan., said the proposal was raised a month ago when senators visited the White House for a broad discussion on trade. He said the lawmakers told the president “that our farmers want markets, and not really a payment from government. And he said, ‘I’m surprised, I’ve never heard of anybody who didn’t want a payment from government.’”

Sen. Bob Corker, R-Tenn., who has been critical of the president in the past, said the tariffs “are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy.”

Republican Sen. Charles Grassley, whose family operates a farm in eastern Iowa, said the administration’s move was “encouraging for the short term” but farmers needed “markets and opportunity, not government handouts.”

The Agriculture Department predicted before the trade fights that U.S. farm income would drop this year to $60 billion, or half the $120 billion of five years ago.

Mark Martinson, who raises crops and cattle in north-central North Dakota and is president of the U.S. Durum Growers Association, said the $12 billion figure “sounds huge” but there are many farmers in need. “I don’t think this will cover us for a very long time — and it might not even buy me a tank of diesel. I think it will only put out the fire a little bit.”

“We are just kind of being played,” added Tom Giessel, who was cultivating his fields when he stopped his tractor to take a cell phone call from a reporter seeking his reaction to the plan.

Giesse, who grows wheat and corn near the western Kansas community of Larned, said he was “glad they are trying to be doing something, but I don’t know when the day is over how much difference it is going to make. The underlying problem is still there.”

The imposition of punishing tariffs on imported goods has been a favored tactic by Trump, but it has prompted U.S. partners to retaliate, creating risks for the economy.

Trump has placed tariffs on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that allies such as the European Union and Canada reject. He has also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

The president is meeting with European Commission President Jean-Claude Juncker on Wednesday. The U.S. and its European allies are meeting as the dispute threatens to spread to automobile production.

Talk to us

More in Herald Business Journal

Homes in The Point subdivision border the construction of the Go East Corp. landfill on Wednesday, Nov. 10, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Mudslide briefly stalls housing project at former Everett landfill

The slide buried two excavators in September. Work has resumed to make room for nearly 100 new houses.

Ameé Quiriconi, Snohomish author, podcaster and entrepreneur.  (Kevin Clark / The Herald)
Snohomish author’s handbook charts a course for female entrepreneurs

She’s invented sustainable concrete, run award-winning wedding venues and worked in business… Continue reading

FILE - In this June 12, 2017, file photo, a Boeing 787 airplane being built for Norwegian Air Shuttle is shown at Boeing Co.'s assembly facility, in Everett, Wash. Boeing is dealing with a new production problem involving its 787 jet, in which inspections have found flaws in the way that sections of the rear of the plane were joined together. Boeing said Tuesday, Sept. 8, 2020, it's not an immediate safety risk but could cause the planes to age prematurely. (AP Photo/Ted S. Warren, File)
FAA memo reveals more Boeing 787 manufacturing defects

The company said the problems do not present an immediate safety-of-flight issue.

A final environmental cleanup is set to begin next year at the ExxonMobil and ADC properties, neighboring the Port of Everett. Photo courtesy of the Washington State Department of Ecology.
Port of Everett to get $350K for its costs in soil clean-up

The end is finally in sight for a project to scrub petroleum from two waterfront parcels, owned by ExxonMobil and ADC.

Shawn Loring, owner of Lazy Boy Brewing, received $10,000 through Everett's federal CARES Act funding.  (Kevin Clark / The Herald)
Everett, Snohomish breweries to open on Everett waterfront

Lazy Boy Brewing and Sound to Summit see a bright future at the port’s Waterfront Place.

A woman walks by models of Boeing Co. aircraft, including the manufacturer's new Boeing 777X, at the Dubai Air Show in Dubai, United Arab Emirates, Wednesday, Nov. 17, 2021. (AP Photo/Jon Gambrell)
India’s Akasa Air buys engines worth $4.5 billion for new 737 Maxs

Boeing clinched a deal at the Dubai Air Show to sell 72 of the jets for some $9 billion.

FAA Administrator Steve Dickson speaks to lawmakers as Michael Stumo, holding a photo of his daughter Samya Rose Stumo, and his wife Nadia Milleron, sit behind him during a Senate Committee on Commerce, Science, and Transportation hearing on the implementation of aviation safety reform at the US Capitol in Washington on Wednesday, Nov. 3, 2021. Samya Stumo was among those killed in a Boeing 737 Max 8 crash in 2019. (AP Photo/Amanda Andrade-Rhoades)
FAA says Boeing is appointing people lacking expertise to oversee airplane certification

The company was replacing senior FAA-authorized engineers who took early retirement during the pandemic.

FILE - In this Wednesday, July 17, 2019, file photo, Rep. Angie Craig, D-Minn., center, talks with Paul Njoroge, right, who lost his wife and three young children, as Michael Stumo, left, who lost his daughter, looks on before the start of a House Transportation subcommittee hearing on aviation safety, on Capitol Hill in Washington. The year since the crash of an Ethiopian Airlines Boeing 737 Max has been a journey through grief, anger and determination for the families of those who died, as well as having far-reaching consequences for the aeronautics industry as it brought about the grounding of all Boeing 737 Max 8 and 9 jets, which remain out of service. (AP Photo/Susan Walsh, File)
Boeing settles with Ethiopia 737 Max crash victims

The agreement allows victims’ families to pursue claims in U.S. courts instead of their home country.

Dennie Willard, a Navy veteran, became homeless in 2014 and began job training through HopeWorks at Renew Home and Decor. (Kevin Clark / The Herald)
Looking for his ‘last job,’ veteran found new work, new life

U.S. Navy veteran Dennis Willard, once homeless, now works for the nonprofit that helped him.

People hold signs in protest of the vaccine mandate along Airport Road next to Boeing on Friday, Oct. 15, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Report: 11,000 Boeing workers seek vaccination exemptions

Reuters says executives are scrambling to balance a company and federal mandate with the need to retain workers.

Port of Everett CEO Lisa Lefeber points back to the new retail site at Fisherman's Harbor at Waterfront Place during a groundbreaking ceremony on Monday, Nov. 8, 2021 in Everett, Washington. The project will construct two new buildings to house the new Asian-inspired Fisherman Jack’s restaurant, South Fork Bakery, and three marine-related offices adjacent to the new Waterfront Place Apartments and Hotel Indigo.
 (Andy Bronson / The Herald)
Port of Everett breaks ground on a new ‘restaurant row’

American-Chinese restaurant Fisherman Jack’s and South Fork Bakery are two businesses that will call the waterfront home.

A private plane taxis past the Paine Field passenger terminal on Wednesday, Nov. 3, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Forecast: A quadrupling of Paine Field passengers by 2040

How should Everett’s airport handle rebounding demand? A virtual meeting is set for Tuesday to talk about a master plan.