Global Geopolitical Series: Trump’s subsidy announcement shows readiness to fight trade war

President Donald Trump surprised his critics and world leaders when he revealed that there are not only offensive weapons in his trade war chests but defensive weapons as well.

Faced with retaliation against U.S. agricultural exports from China, Mexico, and the European Union, President Trump had directed the U.S. Secretary of Agriculture Sonny Prelude to craft a short-term relief strategy targeting agricultural producers of the United States and last night announcement came from the USDA that it would authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods.

USDA released a statement quoting Secretary Sonny prelude as saying, “This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy…….The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”

According to the statement, USDA will use the following programs to assist farmers:

• The Market Facilitation Program, authorized under The Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency (FSA), will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs. This support will help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.
• Additionally, USDA will use CCC Charter Act and other authorities to implement a Food Purchase and Distribution Program through the Agricultural Marketing Service to purchase an unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.
• Finally, the CCC will use its Charter Act authority for a Trade Promotion Program administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to assist in developing new export markets for our farm products.