PortandTerminal.com, July 10, 2019
President Trump, who won the majority of agricultural states in 2016 and retains wide support there, has given farmers some temporary relief by offering billions of dollars in emergency aid to “make it up” to those battered by the trade wars.
WASHINGTON – Nationally, the federal government sent farmers about $8.6 billion in direct payments, part of a $12 billion package approved last year to offset losses experienced from trade disputes with China, Canada, Mexico and the European Union.
“Out of the billions of dollars that we’re taking in [from tariffs], a small portion of that will be going to our farmers”Donald Trump
The U.S. agricultural sector is particularly vulnerable to disruptions in international trading patterns, because, as Peter Friedmann, executive director of the Agriculture Transportation Coalition, explained, “nothing we produce in agriculture or in forest products can’t be sourced somewhere else in the world.” “And if we don’t deliver affordably and dependably,” he added, “our foreign customer will go elsewhere to buy.”
China has been the largest buyer of U.S. soybeans; Mexico and China, the largest purchasers of U.S. pork.
Last year, China’s soybean purchases dropped 74% to $3.1 billion, and pork sales fell 21% to $852 million. Mexico’s purchases of U.S. pork fell 13% to $1.3 billion.
Government Aid to Farmers
U.S. farmers received aid based on bushels of soybeans, corn, wheat and other commodities harvested, along with the number of pigs and amount of milk produced.
President Trump has authorized the USDA to provide another $16 billion in bailout aid on top of the previous $12 billion package.
It (aid money) doesn’t get farmers back to the prices they had when the trade disputes started.Chad Hart, Iowa State University agriculture economist
Trade war cost to American consumers
The costs for consumers of the on-going trade war are mounting up. The recent round of U.S. tariffs on $200 billion in Chinese imports will cost American households $106 billion a year — that amounts to $831 for the average American family, economists at the New York Federal Reserve said.
President Trump’s tariffs are designed to make Chinese imports more costly for American consumers, who may seek out lower-cost items made in the U.S. or from countries that aren’t facing the higher tariffs. That will result in lower demand for Chinese imports, creating a bargaining tool in trade negotiations.
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