Trump to provide aid to farmers to ease trade war pain

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Trump to provide aid to farmers to ease trade pain. Reuters

WASHINGTON/KANSAS CITY, Mo. (Reuters) – The Trump administration on Tuesday said it will use a Great Depression-era programme to pay up to $12 billion to help US farmers weather a growing trade war with China, the European Union and others that the president began.

It is a clear signal the US President Donald Trump is determined to stick with tariffs as his weapon of choice in the conflict.

The move meant to cushion the blow for a politically important constituency was met with broad criticism by many farmers and farm-belt lawmakers, including Republicans. Rural and agricultural states supported Mr Trump by wide margins in the 2016 election.

Mr Trump’s trade policies have become central in several rural-state US Senate races ahead of congressional elections in November.

The relief package is intended as a temporary boost to farmers as the United States and China negotiate over trade issues, officials said.

The aid will be financed through the USDA’s Commodity Credit Corporation and will not require congressional approval, Mr Perdue said.

“This obviously is a short-term solution that will give President Trump time to work on a long-term trade policy,” said Sonny Perdue, the secretary of the US Department of Agriculture.

The administration’s action appeared to divide republicans.

“This trade war is cutting the legs out from under farmers and the White House’s ‘plan’ is to spend $12 billion on gold crutches,” said Senator Ben Sasse, of Nebraska who frequently criticizes the president, a fellow Republican.

Farmers have been a particular target in the current clash over trade policy as other countries seek to retaliate for Mr Trump’s duties on Chinese goods as well as on steel and aluminum imports from the European Union, Canada and Mexico.

The size of the direct payments to farmers as a result of trade shortfalls would be unprecedented, said Scott Irwin, an agricultural economist at the University of Illinois.

“We have never compensated farmers directly on such a large scale for retaliatory tariffs,” Mr Irwin said.

Still, Blake Hurst, a corn and soybean farmer and president of the Missouri Farm Bureau, said that unless the White House’s policies change, the US agriculture industry will continue to suffer.

“The payments will be helpful to farmers facing overdue loans and angry bankers, but are completely insufficient if they mean that tariffs and the trade war will last for the foreseeable future,” Mr Hurst said. “They are a very temporary bandage to a self-inflicted wound.”

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