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White House Announces $16 Billion In Aid To Farmers Hurt By China Trade Dispute

Agriculture Secretary Sonny Perdue announced on Thursday $16 billion in aid to help farmers hurt by the ongoing U.S.-China trade dispute.
Andrew Harnik
Agriculture Secretary Sonny Perdue announced on Thursday $16 billion in aid to help farmers hurt by the ongoing U.S.-China trade dispute.

Updated at 6:15 p.m. ET

The Trump administration will provide $16 billion in aid to help keep farmers afloat as they reel from the yearlong trade war between the U.S. and China, the latest sign that the world's two largest economies are still far from striking a long-term trade agreement.

The bulk of the support, or about $14.5 billion, is direct aid to farmers, which producers will start to see some time this summer, Agriculture Secretary Sonny Perdue told reporters in a briefing on Thursday.

"While farmers themselves will tell you they'd rather have trade than aid, without the trade that has been possible, they're going to need some support," he said.

Perdue placed the blame for farmers' economic losses on China, rather than on the Trump administration's own hard-line trade tactics.

"Frankly," he said, "all of this would have been moot if China would have acted appropriately and fairly in many of the areas regarding intellectual property theft and nontariff barriers that they have put up for many years."

The aid comes from a fund known as the Commodity Credit Corporation, a federal entity overseen by the Agriculture Department and founded during the Depression. It was established to stabilize farm income and prices by buying farmers' crops.

Up to $30 billion is available to the program every year, an amount that has not changed since 1987, according to the Congressional Research Service. Allotment of the program's funds do not require congressional approval.

While President Trump has repeatedly suggested that China will be paying for the aid in the form of tariff revenue, the CCC's fund does not receive any direct payments from tariffs.

When asked to explain the discrepancy, Perdue said, "The president feels very strongly that the tariff revenue is going to be used to support this program, which will come back out and replenish the CCC, as it does every year."

"While legally you can't direct tariff payments into agriculture, that's what the president feels like China is paying for this program."

The plan also includes efforts to sell American products in more markets outside of China. Officials said about $100 million will be put toward market diversification.

At the White House on Thursday surrounded by farmers and ranchers, Trump said China has taken advantage of the United States for too long and has stolen billions in intellectual property. His administration's 25% tariff on products that Americans import from China was necessary to "level the playing field," Trump said.

"The $16 billion in funds will help keep our cherished farms thriving and make clear that no country has veto on our economic and national security," Trump said.

Striking a more long-term trade pact with China is the ultimate goal, Trump said, but the president did not indicate his administration was any closer to an accord than it was earlier this month when trade talks fell apart with Beijing.

"Now is the time to insist on fair and reciprocal trade for our workers and for our farmers," Trump said. "I remain hopeful that at some point we'll probably get together with China. If it happens, great. If it doesn't, that's fine."

Trump said China is paying for his administration's tariffs, though multiple studies have shown that importers foot the bill for tariffs and, in the end, U.S. consumers are the ones who will end up paying.

Groups that represent farmers like the National Farmers Union were cautiously supportive of the aid for their stressed-out members, calling the announcement a "short-term fix."

"Our ongoing trade wars have destroyed our reputation as a reliable supplier and have left family farmers with swelling grain stores and empty pockets,"said Hannah Packman, a spokeswoman with the National Farmers Union. "The very least we can do is provide our country's struggling food producers with the certainty of a longer-term plan that also addresses the persistent and pernicious problem of oversupply."

Agriculture has been among sectors hit hardest by the U.S. trade conflict with China. The announcement of new relief to farmers comes as fears rise over an economic slump in the agricultural economy.

Trump's hard-line moves on trade with China have reduced U.S. income at a rate of around $1.4 billion a month, according to the National Bureau of Economic Research. Analysis by the New York Fed estimatesthat the new tariffs will cost the average U.S. household $831 annually.

Last year, the Trump administration provided $12 billion in aid to farmers to try to offset their losses from the trade war.

The economic troubles have had multiplier effects in recent months. Some farmers across the Midwest are struggling with debt, prompting bankruptcy filingsamong farmers to rise sharply. A further blow for the country's agricultural sector has come in the form of natural disasters. Floods have killed livestock and drowned hundreds of millions of dollars in crops.

Some Democrats, including Michigan Sen. Debbie Stabenow, criticized the Trump administration's latest attempt to shore up farmers' wages, saying the financial support to the agricultural sector is only necessary because of the president's "chaotic trade agenda."

"Unfortunately, this complex scheme leaves [farmers] with more questions than answers. I have a number of concerns about whether this plan is fair and equitable to all farmers," Stabenow said in a statement. "Government checks are no replacement for lost markets, and this temporary support will only go so far."

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Bobby Allyn is a business reporter at NPR based in San Francisco. He covers technology and how Silicon Valley's largest companies are transforming how we live and reshaping society.
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