As Trump Tariffs Loom, White House Eyes Costly Farmer Bailouts

Before the plan of President Trump to impose large rates all over the world this week, his administration is weighing a new tour of emergency aid to farmers, who will probably be captured in the middle if the American commercial partners are sold.

The first discussions offer tacit recognition that the large Trump rates could trigger financial devastation throughout the agricultural sector of the United States, a crucial vote that the president has tried in the same way to safeguard during his 2018 commercial war with China.

While the president has not announced any detail of a package of aid, his consultants have reported in the last few days that he could have followed a game book similar to the one he used in his first term, when he directed billions of payments to farmers who have seen their exports to China fall into a commercial war with Beijing.

Such a rescue package eventually proved expensive, with the government shelled About $ 23 billion After China has imposed high retaining tasks on soy, corn, wheat and other American imports starting from 2018. That money came from a fund at the United States’s agriculture department, a part of which can be used to respond to emergencies, including commercial disputes.

Brooke Rollins, the secretary of agriculture, declared last week that the administration could try to offer emergency aid to farmers, telling journalists that Mr. Trump had asked her to “have some programs that could potentially mitigate any economic catastrophes that could happen” in a global commercial stall.

But this time the price could prove to be even higher, since Trump has threatened to hit many countries, including American allies such as Europe, Canada, Mexico and Japan. The potential area of ​​their collective punishment could inflict deeper and more lasting damage on American companies.

“This could really lead to great requests in terms of attempting to help farmers,” said Joseph Glauber, a researcher at the International Food Policy Research Institute who previously was an economist head for the USDA

The administration officials discussed the first outlines of a possible rescue of farmers with sector pressure groups and offices of the Republican congress, according to four people who are familiar with the matter, who spoke on condition of anonymity to describe the interviews. They collected some potential mechanisms to provide the funds, some of which could request legislation, said the people, warning that the conversations were in the early stages because Trump has not yet finalized his commercial strategy.

But an expensive federal rescue threatens to cut off one of the distinctive reasons of Mr. Trump to pursue the protectionist policies in the first place: the desire to rake in “a lot of money”, as the president said. Trump and his republican allies say that the new rates could help pay for their plan still formed to expand and extend a series of expiring tax cuts, which could cost in the trillions of dollars.

“In addition to consumers who are affected by rates, you now have taxpayers who will be in the hook,” said Alex Deranto, a senior economist of the fiscal foundation, a Think Tank that generally favors the lower taxes.

The White House refused to comment, but an official – speaking only on condition of anonymity – said that any discussion on tariff aid is preliminary dates given the ongoing discussions on the rates of Mr. Trump and its negotiations with other countries.

The USDA did not respond to a commentary request.

While Mr. Trump has reported in the last few days that he could relax his original and aggressive ambitions, has made progress with a plan to impose “retaliation” rates to the nations that impose duties or erect other expensive commercial barriers to US imports. The president promised that the rates starting from April 2 would have been significant, since it tries to increase revenue, restore the nation’s commercial relations and the Cajole companies in the production of more than their products in the United States.

“We could take less than they are loading. Because they accused us so much, I don’t think they can take it,” Trump said on Monday.

Economists widely warn that rates could fall heavily on American consumers, in particular if companies increase prices to compensate for the fact that they have to pay more to import the necessary goods. Those anxieties contributed to Send the trust of consumers collapsed this month At its lowest level since January 2021, according to the results issued on Tuesday by the Board of Directors.

But the impact on farmers should be particularly acute. China, which was hit by 20 % rates since Trump came into office, already sold With samples on chicken, wheat, corn and cotton. THE European Union He has developed a considerable list of agricultural and consumption products to be aimed if Mr. Trump makes his threat to impose steep rates on that block.

Many domestic producers fear that the rates of Mr. Trump can reduce the prices of raw materials and make their corn, eggs, soybeans and other less desirable goods for foreign buyers if these nations respond with samples on American exports.

“Obviously, we deal with the economy of where we are today,” said Kenneth Hartman Jr., an Illinois farmer who acts as president of the Corn Council of the National Corn Growers Association.

Once the rates of Mr. Trump have an effect, Hartman said that his sector “would love to see some new markets”. But he also expressed concern for a prolonged commercial war, which could entail the US farmers who gave the markets to foreign competitors – or, worse still, in the face of the risk of hard retaliation from his longtime commercial partners, in particular Mexico.

“This is probably our biggest concern right now,” said Hartman.

Retaliation for the last Trump tariff campaign, starting from 2018, led to a loss of $ 27 billion in agricultural exports at that time, according to the USDA estimates economists. Most of the losses arrived following a commercial war with China, after Mr. Trump aimed at a vast band of the exports of the country, pushing Beijing to resist his punishment.

An idea that the administration has weighed is whether to offer a new tariff relief through the credit corporation goods at the USDA, according to people who are familiar with the matter.

Credit Credit Corporation is a key USDA loan vehicle: it provides money for federal programs to support agricultural income, stabilize the prices of raw materials and respond to natural catastrophes. While his finances are complicated, the entity can borrow up to $ 30 billion from the Treasury department.

In the first term of Trump, the USDA program distributed money based on a formula that provided for agricultural losses. The loan saved part of the puncture from the commercial war – and offered a political advantage to Trump who entered an electoral year – but he also faced Significant complaints By farmers to whom the help was slow and difficult to access.

Josh Gackle, the president of the American Soybean Association, said that the preference of the sector is not for the government’s handouts but “access to a free and fair trade market”. In the meantime, he said he hoped that the administration could “find a way to face that financial impact on our farms” from the next rates.

But there are growing doubts that the USDA has funding at his disposal to help farmers, especially if the next rates of Mr. Trump cause a widespread international beat.

Any gap could request the congress to fill the Agency’s loan authority in advance, raising a complicated political debate in Capitol Hill, where some conservative republicans have historically criticized the USDA program and have tried to limit the way the department can spend its funds.