Topline: President Donald Trump announced a $16 billion aid package for farmers suffering from tariffs, the second farm bailout in less than a year. As the U.S.-China trade war continues, American farmers—who were a key demographic in electing Trump—are increasingly losing confidence in the administration as the agriculture industry bears the brunt of the tariffs.
• $14.5 billion of the $16 billion aid package will go directly into farmers’ pockets, Agriculture Secretary Sonny Perdue said in a conference call Thursday.
• $1.4 billion will go toward food for schools and food banks, according to The Washington Post.
• $100 million will be used for a program that helps develop new markets for U.S. exports outside of China, according to CNBC.

Key P.O.V: “Farmers themselves will tell you they’d rather have trade than aid,” Perdue said, according to the Wall Street Journal, but in the absence of a deal “they’ll need some support.”

Background: The aid comes after Trump increased tariffs from 10% to 25% on $200 billion worth of Chinese goods after trade talks with China fell apart earlier this month. China, in turn, responded with its own wave of tariffs.

This is the second aid package for farmers hit by the trade war. The Trump administration spent $12 billion in aid last year after the original tariffs were levied.

While other industries, particularly tech and automobile companies, are being hit hard by tariffs, American farmers who sell their crops in China have been disproportionately affected. Soybean exports, for example, have already dropped 80% since the first round of tariffs last year.

How is the government paying for this? Trump said in an announcement that tariff revenue collected by the government would be the source of the aid money. But since directly pouring tariff revenue into the aid package isn’t legal, the money will be drawn from the U.S. Treasury through an Agriculture Department program that has the authority to spend $30 billion on programs to help farmers without Congressional approval.

The aid might help, but … : A recent Fox Business survey found that more than a third of farmers said they were losing confidence in Trump’s ability to secure a trade deal. </s> The Trump administration rolled out a second aid package worth for American farmers on Thursday, worth $16 billion, to help mitigate the effects of a more-than year-long trade war between the U.S. and China.

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President Trump said that the aid -- a response to China’s latest retaliatory tariffs -- will include $14.5 billion in direct payments to farmers through the market facilitation program. There will be three payments installments, beginning in July. Additional payments will follow in November and January as needed.

Another $1.4 billion will be allocated to the Food Purchase and Distribution Program to purchase surplus commodities affected by the trade war. Those goods will then be distributed to schools, food banks and other groups, the White House said.

The remaining $100 million will go to developing new export markets for American producers through the Agricultural Trade Promotion Program.

"We will make sure the farmers get the relief they need, and very, very quickly," Trump said at a White House event on Thursday. "It's a good time to be a farmer."

A group of farmers came to the White House on Thursday to attend an event with the president, during which details of the second aid package were released.

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"We're giving them that level playing field that's so important," Trump said.

“Details on the new trade mitigation program will be forthcoming shortly, but we want to be clear that the program is being designed to avoid skewing planting decisions one way or another,” a spokesperson for the U.S. Department of Agriculture said earlier in the week. “Farmers should continue to make their planting and production decisions with the current market signals in mind, rather than some expectation of what a trade mitigation program might or might not look like, based on a media story.”

China is the biggest buyer of U.S. soybeans, importing more than $12.4 billion worth of the oil seed in 2017, according to the Peterson Institute for International Economics, but retaliatory tariffs by China resulted in U.S. soybean exports to China falling by more than 80 percent with Brazil and Argentina supplying China instead.

Last year, as a result of the tariffs, soybeans in storage totaled about 3.74 billion bushels, up 18 percent from the prior year, according to data from the USDA.

According to Bloomberg, the aid plan could include payments of about $2 per bushel to soybean growers, 63 cents per bushel to wheat growers and 4 cents per bushel to corn growers. The administration’s last aid plan included $1.65 per bushel for soybean growers, 14 cents per bushel for wheat and 1 cent per bushel for corn.

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In July, the Trump administration announced a $12 billion farm aid package -- including $4.7 billion in direct payments to farmers -- to help shield them from the effects of global trade spats with China, Mexico, Canada and the European Union. The bulk of the payments went to soybean farmers. </s> The Trump Administration will announce a new $16 billion farm aid package to offset losses from the U.S. trade war with China, Agriculture Secretary Sonny Perdue confirmed Thursday.

In an interview on Fox Business Network, Perdue said: “China is going to pay for this $16 billion through tariffs coming in” and that “the revenue we’re receiving is what the president has intended to fund the farmers who are being hurt by these retaliatory tariffs.”

It would be the second bailout for farmers connected to Trump’s tariff showdowns with China, Mexico and other countries. The Trump administration announced $12 billion in emergency measures last July.

Perdue acknowledged Thursday that U.S. farmers have been hit hard by the escalating trade fight with Beijing, and accused China of targeting the president in advance of his 2020 re-election bid.

“Farmers have been hurt disproportionately and China knows. They’ve gone right at President Trump’s base politically that makes farmers feel pain, and he’s not letting them bear the brunt of that,” Perdue said.

Perdue did not offer further details before an official announcement expected later Thursday.

President Trump was scheduled to meet farm groups at the White House at a 3:15 p.m. event Thursday. </s> President Donald Trump on Thursday unveiled a new $16 billion aid package to help farmers caught in the crossfire his trade war with China.

"The farmers have been attacked by China," Trump told reporters at the White House. "We're going to help out our farmers and we're giving them that level playing field that is so important."

Trump again claimed that China is paying the 25 percent tariffs he has imposed on $200 billion in imports, which economists agree are paid by businesses and consumers.

"Some of that money will go to the farmers to help them out during a period where trade has been very unfair to them," Trump said.

Agriculture Secretary Sonny Perdue said the bulk of the funds will go to direct payments to crop and livestock producers, while a small portion will be used to purchase food to use in US aid programs like food banks and school lunch programs.

"The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners," Perdue told reporters in a conference call.

"Farmers would rather have trade than aid but without the trade they are going to need some support."

Trump's aggressive tariff strategy, especially against China, has drawn stiff retaliation from Beijing and others designed to hit the United States where it hurts: farm country.

Soybeans and pork have been primary targets, but many other crops have suffered directly or indirectly. Soybean exports to China fell 75 percent in 2018, according to Commerce Department figures.

The Trump administration ramped up the aid from the $12 billion provided last year but officials said they increased and redesigned the program this year to make it easier to understand.

There were high hopes early this month that a resolution with China was within striking distance but that optimism largely evaporated when Trump said Beijing had backed away from commitments considered already settled.

- Not playing by the rules -

He more than doubled existing punitive tariffs on $200 billion in Chinese goods, and threatened to hit all the goods that had been spared so far.

"China hasn't played by the rules for a long time and President Trump is standing up to them, sending the clear message that the United States will no longer tolerate their unfair trade practices," Perdue said.

The US Department of Agriculture will calculate damage done by the retaliation, and officials said the first of three payments is expected to go out in July or August.

The officials did not indicate the expected size of the payments, but Perdue said the aid will be "heavily skewed" towards the first payment, while the others will depend on the market and the status of the trade talks.

But reaching an agreement now "depends on China."

USDA officials said the amount each farmer receives will be based on the damage calculated to each US county, with equal payments made to all farmers based on the acreage planted, regardless of crop, to prevent distorting planting decisions.

Dairy and pork producers, as well as growers of cherries, cranberries and nuts, also will receive support, officials said. </s> President Donald Trump says he is “honored” to give U.S. farmers hurt by the trade war with China another $16 billion in aid.

Flanked by potato growers, ranchers and dairymen in the White House, Trump said Thursday the aid “will help keep our cherished farms thriving and make clear that no country has a veto on America’s economic and national security.”

Trump added that trade has been “very unfair” to the farmers who he says support him politically.

This is the second multibillion-dollar bailout the Trump administration has provided to U.S. farmers who have seen Chinese markets for their products dry up because of tariffs China imposed on U.S. goods to retaliate for U.S. tariffs on Chinese products. The White House gave farmers $12 billion last year.

U.S. Agriculture Secretary Sonny Perdue says farmers should see the first installment of the new $16 billion in aid in July or August. Perdue said he doubts if the United States and China can reach a trade deal by then.

Most of the money will go to farmers who grow and sell such crops as soybeans, corn, peanuts and wheat. Money will also be set aside to buy excess products from the farmers and send them to schools and food banks.

“I can’t recall a president more concerned about farmer well-being. We are working hard to assess trade damages and this package ensures farmers will not bear the brunt,” Perdue said.

While Trump said Thursday that many farmers told him he is “doing the right thing,” some trade experts call the bailout a political ploy and say farmers are more concerned about winning back the lost Chinese market. </s> White House Announces $16 Billion In Aid To Farmers Hurt By China Trade Dispute

The Trump administration will provide $16 billion in aid to keep farmers afloat as they reel from the yearlong trade war between the U.S. and China, Agriculture Secretary Sonny Perdue told reporters in a briefing on Thursday.

The bulk of the aid, or about $14.5 billion, is direct aid to farmers, which producers will start to see some time this summer, Perdue said.

"While farmers themselves will tell you they'd rather than 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 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 non-tariff barriers that they have put up for many years."

While the aid comes from a fund known as the Commodity Credit Corporation, a federal entity founded during the Depression devoted to stabilizing farm income and prices, Trump administration officials including Perdue have said China will pay for the aid to the farm sector.

When asked to explain that assertion, Perdue explained the president's logic.

"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," Perdue said. "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.

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 are rising 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 estimates 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 filings among 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.

Trump is expected address the nation's farmers Thursday afternoon from the White House. </s> The Trump administration on Thursday announced a $16 billion trade aid program for American farmers that includes a three-pronged aid package for American farmers who have been hurt by the U.S. trade war with China.

The centerpiece is cash payments totaling $14.5 billion to producers of a variety of crops as well as dairy and pork producers impacted by retaliatory tariffs. U.S. tariff revenue collected by the Treasury would be used to support the program, according to the U.S. Department of Agriculture.

"The package we're announcing today ensures that farmers will not bear the brunt of those trade practices by China or any other nation," Agriculture Secretary Sonny Perdue said Thursday on a press call.

In addition, the government plans bulk purchases of about $1.4 billion of fresh produce and other food products impacted by tariffs. Food would be used to help food banks, pantries and school meal programs.

The USDA also plans a $100 million trade promotion program for livestock producers and certain crops to help industry sectors develop new markets. A similar program was launched as part of the administration's 2018 trade relief program for agriculture.

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

According to USDA chief economist Rob Johansson, the department's $14.5 billion direct payment program to farmers is above the administration's $12 billion plan announced last year. He said the new farm relief program looks at trade damages from last year's tariffs but also goes back to previous actions by China and other trading partners with retaliatory levies against American agriculture.

"We are looking back a number of years to look at what China has purchased from us in the past, and we're bringing that into our baseline," Johansson told reporters.

Soybean farmers have been among the hardest hit in the China trade war in terms of dollar value. Before the trade war, China bought roughly half of the U.S. soybean exports. But the value of soybean exports to China fell 74% to $3.1 billion in 2018 from about $12.2 billion the previous year, according to the USDA. </s> WASHINGTON/KANSAS CITY, Mo. (Reuters) - The Trump administration on Tuesday said it will use a Great Depression-era program to pay up to $12 billion to help U.S. farmers weather a growing trade war with China, the European Union and others that the president began.

It is a clear signal the U.S. 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 Trump by wide margins in the 2016 election.

Trump's trade policies have become central in several rural-state U.S. Senate races ahead of congressional elections in November.

The president, speaking at an event in Kansas City on Tuesday, reaffirmed his support for tariffs and pledged that "farmers will be the biggest beneficiary."

"Just be a little patient," Trump said.

The relief package is intended as a temporary boost to farmers as the United States and China negotiate over trade issues, officials 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 U.S. Department of Agriculture.

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

The administration's action appeared to divide Republicans, with some praising the move and others troubled by what they view as the kind of widespread government-assistance program their party has traditionally opposed.

"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 Trump's duties on Chinese goods as well as on steel and aluminum imports from the European Union, Canada and Mexico. Those affected economies have in turn targeted U.S. agricultural products, including soybeans, dairy, meat, produce and liquor.

The United States exported $138 billion in agriculture products in 2017, including $21.5 billion of soybeans, the most valuable export. China alone imported $12.3 billion of U.S. soybeans last year, according to the USDA.

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," Irwin said.

The news lifted shares of farm equipment companies on the prospect that farmers will have more money to spend on tractors and other farm gear. Deere & Co jumped 3.1 percent, while Caterpillar Inc gained more than 1 percent and AGCO Corp rose 0.6 percent.

Stock options trading in Deere and Caterpillar also saw a burst of activity in the 30 minutes before the news broke, according to a Reuters analysis of Trade Alert data. Some of those contracts more than doubled in price after word of the pending plan broke in a Politico report.

Options activity has been known to spike before the public announcement of market-moving news and the U.S. Securities and Exchange Commission has pursued enforcement actions when the activity has been determined to be insider trading involving options. There was no immediate indication that Tuesday's volume increases were anything other than coincidental.

Soybean futures <0#S:>, driven to a 10-year low in part by China's retaliatory tariffs, rose 1.2 percent and hit their highest in two weeks as traders bet farm aid would improve demand, reducing a current surplus supply.

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 U.S. 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," Hurst said. "They are a very temporary bandage to a self-inflicted wound.”

Some members of Trump's own party agreed.

"Tariffs are taxes that punish American consumers and producers," Kentucky Republican Senator Rand Paul wrote on Twitter https://twitter.com/RandPaul/status/1021791878663090177. "If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs."

Kevin Cramer, a U.S. representative trying to unseat Democrat Senator Heidi Heitkamp in North Dakota, praised the move.

"Great to see @POTUS (Trump) providing aid to farmers impacted by retaliatory #tariffs," Cramer wrote on Twitter https://twitter.com/RepKevinCramer/status/1021789813299716097.

Later this week, Trump will visit Iowa and Illinois, two other farm-belt states, as he seeks to shore up support for Republican candidates in the U.S. Midwest. </s> (Reuters) - The Trump administration was set on Tuesday to announce up to $12 billion in aid for U.S. farmers to shield them from the repercussions of trade spats between the United States and China, the European Union and others.

“President Trump has said he has the back of U.S. farmers and today demonstrated this commitment with an aid package to sustain American agriculture cutoff from critical export markets as his administration works to realign U.S. global trade policy.

“U.S. pork, which began the year in expansion mode to capitalize on unprecedented global demand, now faces punitive tariffs on 40 percent of its exports. The restrictions we face in critical markets such as Mexico and China – our top two export markets by volume last year – have placed American pig farmers and their families in dire financial straits. We thank the president for taking immediate action.”

“The big news today for agriculture out of Washington is the plan to use a Great Depression-era policy to use the Commodity Credit Corporation to disperse $12 Billion, with a capital B, in aid to farmers hit by the current trade impasse.... Personally, I’m not sure how all this will play out other than to get the vibe that the Trump administration is in it for the long haul on trying to hammer out these new trade pacts. Mexico and Canada have shown a recent interest to step up talks, but China remains largely at an impasse. Most every grower I know would rather have great trade avenues and receive their revenue from the market, but this shows that Trump and the USDA plans to give his rural base some relief as these negotiations are certainly causing some financial pain to those regions in the last few months.”

“The $12 billion in farm aid announced today will provide a short-term fix, but it’s not a long-term solution. As I’ve said all along, nobody wins in a trade war. We must continue to expand and open markets, protect the Renewable Fuel Standard and allow Iowa products to be sold across the globe. Iowa farmers are the most productive in the world and will always win when they have unrestricted access to markets. I will never stop fighting for Iowa families affected by this trade war.”

“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. They are a very temporary bandage to a self inflicted wound.”

“It’s unclear for now, especially since we don’t know how much of it will be dedicated to cotton. The main focus will be soybeans, which is a much larger market and has a bigger political impact.”

“When politics or market forces beyond farmers’ control put their business at risk, the government can and should consider initiatives to keep family farmers on the farm. As farmers, we want access to markets, which will allow us the ability to compete on a level playing field but support these payments if this stands as our only recourse. We will continue to monitor the details of this proposal as it comes together.”

“The best relief for the president’s trade war would be ending the trade war.”

“Farmers need contracts, not compensation, so they can create stability and plan for the future. This proposed action would only be a short-term attempt at masking the long-term damage caused by tariffs.”

“The $12 billion package of agricultural assistance announced today by the administration will provide a welcome measure of temporary relief to our farmers and ranchers who are experiencing the financial effects of the trade war. This should help many of our farmers and ranchers weather the rough road ahead and assist in their dealings with their financial institutions.

“We are grateful for the administration’s recognition that farmers and ranchers needed positive news now and this will buy us some time. This announcement is substantial, but we cannot overstate the dire consequences that farmers and ranchers are facing in relation to lost export markets. Our emphasis continues to be on trade and restoring markets, and we will continue to push for a swift and sure end to the trade war and the tariffs impacting American agriculture.”

CASEY GUERNSEY, FORMER MISSOURI LAWMAKER AND SPOKESMAN FOR AMERICANS FOR FARMERS & FAMILIES

“Rather than accepting retaliatory tariffs and seeking to offset them with federal assistance, America’s producers believe the administration should look toward solutions that will enable them to export their homegrown goods to critical markets around the globe.”

“My family got into farming to sell beef, not to accept government assistance. While we need to hold our trading partners to account and ensure fair deals are reached, our government must also pursue long-term and sustainable solutions.”

“I don’t know the details but I’m not thrilled. I’ve spent many, many years and many checkoff dollars to build our markets and all of this got thrown in the dumpster in one tweet. We (farmers) don’t want direct payments … we just want open markets. Quite honestly, I’ve been through the Russian (grain) embargo with (President) Carter and other trade wars – nobody wins them. And I have a bad taste in my mouth over this one. I think there are better ways around this. I’m sick and tired of weaponizing food. We fight bad weather, it’s hard to fight tariffs and embargos.”

“Our best course of action is to expand other markets and develop new ones to buy the soybeans we’re not selling to China.

This means finishing the NAFTA negotiations as soon as possible so we can begin talks on new bilateral agreements with other key soybean markets including Japan, Vietnam, Indonesia and the Philippines.”

“The American Soybean Association has consistently advised the Administration that the best way to reduce our nation’s trade deficit is by increasing exports, including of agricultural products.”

“Since the Administration has decided to use tariffs to address trade concerns with China, and China has retaliated, farmers don’t have time to wait to see how this trade war turns out.”

SCOTT IRWIN, AGRICULTURAL ECONOMIST WITH THE UNIVERSITY OF ILLINOIS

The direct payment program portion will be “the largest and probably the most controversial” part of the aid package.

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

“Twelve billion dollars, the vast majority of it sent to farmers mainly in the Midwest in the form of direct payments, is a shock-and-awe response to the hit that farmers have taken in the trade war.”

“The fine print will be important. We know the package won’t make farmers whole.”

Shares of farm equipment companies rose. Deere & Co jumped 2.7 percent, while Caterpillar Inc gained more than 1 percent and AGCO Corp rose 0.5 percent.

Soybean futures <0#S:> rose 1.3 percent to their highest in two weeks.
U.S. President Donald Trump announces a second aid package worth $16 billion for farmers impacted by the China–United States trade war.