The Trump administration announced a planned $12-billion emergency federal bailout Tuesday for U.S. farmers, who are suffering from the impact of retaliatory Chinese tariffs on exported U.S. goods. Critics of the president are questioning government bailouts related to Trump’s self-inflicted trade war, but supporters argue that increased revenue from U.S. tariffs on Chinese goods more than pays for the bailout.
'Tariffs Are The Greatest!'
Secretary of Agriculture Sonny Perdue told reporters Tuesday that the temporary bailouts will ease the trade war burden on U.S. farmers while the administration works on longer-term trade deals with international partners. Perdue made the announcement the same day Trump tweeted that “Tariffs are the greatest!”
Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that - and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Trump recently threatened to impose tariffs on all $500 billion-plus of annual Chinese imports, and China has retaliated with its own tariffs on soybeans and other U.S. exports, which has been extremely costly to U.S. farmers. Many of the impacted farms are located in key 2018 election swing states such as Wisconsin, North Carolina, Ohio and Iowa.
Bailout Critics
Crain's Detroit Business reporter Dustin Walsh tweeted that, even if the bailout is temporary, U.S. soybean farmers could permanently lose their Chinese customers to Brazil and other international producers.
So the question will be when this trade war subsidies (assuming it will), will Chinese consumers suddenly reverse course and drop Brazil as their supplier to return to the U.S.? If not, this $12B emergency bailout will have to be long-term as U.S. farmers rush to plant other food
— Dustin P. Walsh (@dustinpwalsh) July 24, 2018
While investors wait for details about the new bailout, the announcement is already impacting the market. Shares of Deere & Company DE were up by 3.18 percent at the close Tuesday.
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