U.S. government pledges $16B in aid to help farmers offset tariffs
May 23 (UPI) — Agriculture Secretary Sonny Perdue unveiled a $16 billion aid program Thursday to help U.S. farmers offset the effects of Chinese tariffs.
“China’s going to pay for these, the $16 billion of tariffs coming in,” Purdue said. “Some of this $16 billion is going to be used for market access programs to go and build markets elsewhere. And if China decides not to play then we will sell these great products elsewhere.”
The tariffs, however, are actually paid by firms that import goods into the United States. Those added costs often are often passed on to consumers though price increases — something with which While House economic adviser Larry Kudlow has concurred.
Soybean exports to China have fallen by more than 80 percent in the past year as the trade war with the United States drags on. China instead buys soybeans from Brazil and Argentina.
“Details on the new trade mitigation program will be forthcoming shortly, but we want to be clear that the program is being designed to avoid skewing planting decisions one way or another,” the U.S. Department of Agriculture said in a statement.
Last year, the USDA’s Market Facilitation Program made direct payments to farmers of nine different commodities, with soybeans getting the majority. That program paid out $10 billion.
Soybean prices neared the lowest level in more than a decade as trade talks between the United States and China broke down earlier this year. May soybean futures dropped about 12 cents a bushel Sunday.
“Our farmers will do better, faster and starving nations can be helped,” Trump said.
But corn and soy farmers wouldn’t immediately benefit from that because the majority of their crops aren’t for human consumption — they are turned into animal feed, oil and ethanol.