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Trump’s Plan to Bail Out Farmers During the Trade War Could Backfire

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A farmer harvest soybeans in Owings, Maryland. The majority of Maryland’s soybean crop is sold to the state’s chicken industry.

President Donald Trump escalated the United States’ trade war with China over the weekend, sending markets into a tailspin and alarming business and agriculture leaders. After trade talks broke down last week, the Trump administration increased tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent. By Monday, China had retaliated in kind, raising tariffs on nearly $60 billion of American goods.

Recent analysis has shown that the costs of Trump‘s tariffs fall on domestic consumers, as household goods become more expensive. The trade war has also hit the agriculture, retail, and manufacturing industries, all of which rely on China‘s goods or its business: In 2017, the U.S. exported 60 percent of its soybean crop to China, the world’s largest importer of soybeans.

Now, Trump‘s plan to deal with this loss—subsidizing the crops China refuses to buy and sending them to “needy countries”—has provoked almost as much ire as the continued onslaught of tariffs.

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