With President Trump preparing a sweeping new round of tariffs to be unveiled Wednesday, his administration is looking at ways to blunt some of the damage a trade war will do to farmers. Insiders tell the New York Times that administration officials have already held meetings with farm industry lobbying groups about a possible farm bailout. During Trump's first administration, the government paid out more than $23 billion in aid to compensate farmers for losses after China hiked tariffs on American farm exports in retaliation for US tariffs. US Department of Agriculture economists estimate the trade war caused a $27 billion drop in agriculture exports.
Trump plans to hit a lot more countries with tariffs this time around, potentially causing much heavier losses for American farmers, and it's not clear whether the USDA will be able to access enough funds to compensate farmers, the Times reports. Sources told Politico last month there is only around $4 billion left in the USDA fund that Trump tapped to compensate farmers during his first term. China has already imposed new tariffs on a variety of American agricultural exports, including corn and chicken.
A big worry for farmers is the long-term loss of markets after retaliatory tariffs make American exports more expensive. During the trade war with China that started in 2018, China started buying more soybeans from countries including Brazil and Argentina, and US exports of the crop to China never returned to the pre-2018 level. "When the Trump administration imposes tariffs on China, China says, 'Well, we're not going to purchase soybeans from you, or we won't buy as many,'" Nick Levendofsky, executive director of the Kansas Farmers Union told NPR earlier this month. "That's the problem—they have alternatives." (More tariffs stories.)
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