Trump Seeks New $15 Billion Subsidy to Protect Farmers from His Own Trade War
Will China trade war fallout become the quagmire that defines Trump's presidency?
Editor’s note: Trump is discovering that economic interventionism at home is every bit of a slippery slope to a quagmire that military interventionism is abroad. Every instance of interference causes fallout which then demands even more intervention to set it “right”. Meanwhile economic freedom which is the true cause of growth is set back at each step.
President Donald Trump is seeking an additional $15 billion in U.S. subsidies in an effort to protect farmers from the devastating impact of his trade war with China. That’s on top of $12 billion already earmarked for the farmers to help them weather the fallout.
That would be an additional bill for U.S. taxpayers already shouldering the cost of increased tariffs in the form of higher costs for products and parts from China.
Trump revealed the subsidy figure in a tweet Friday. He suggested the government use the funds to buy agricultural products to ship to other nations for humanitarian aid, though setting up such a system would be extremely complicated. In his most recent budget proposal, Trump proposed eliminating three food aid programs, Politico noted.
The president appeared to dismiss the impact of the cost as he falsely claimed — again — that “massive” tariff payments are being paid by China “directly” to the U.S. Treasury, which would presumably be used to cover the cost of the subsidy. There is “absolutely no need to rush” to negotiate a deal with China, he tweeted.
In fact, the tariffs are paid by U.S. importers, who pass on the extra costs to the American consumer in the form of higher prices for products, a fact White House economic adviser Larry Kudlow admitted Sunday. Economists have estimated that the trade war is costing the U.S. more than $3 billion a month.
Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S….
— Donald J. Trump (@realDonaldTrump) May 10, 2019
The administration last year earmarked $12 billion in aid to farmers, almost all of it in direct payments. Sen. Chuck Grassley (R-Iowa) and Sen. Jon Tester (D-Mont.) applied for funds for their farms.
The rural vote helped put Trump over the top in the 2016 election, yet his trade war has hit farmers particularly hard. It has contributed to a record number of farm bankruptcies as U.S. farm exports plunge.
Other industries affected by the tariffs are not receiving subsidies.
Trump has called farmers “great patriots” who are willing to sacrifice because they “know they’re doing it for the country.”
Trump: "Farmers are great patriots. These are great patriots. They understand that they're doing this for the country." pic.twitter.com/fAALBODo0Q
— Josh Marshall (@joshtpm) April 9, 2018
Source: Huffington Post