As U.S. farmers prepare for spring planting season, federal tariffs and trade wars are among their top income worries. Their concerns are shared by lawmakers who “fear they’ll have to enact billions of dollars in new aid to rescue farmers harmed by President Donald Trump’s escalating trade wars with China, Canada, and Mexico, reports Meredith Lee Hill of Politico. “The fund Trump tapped to send farmers $28 billion in 2018 is now dwindling.”
During Trump’s first-term tariff duel with China, his administration used the Department of Agriculture’s Commodity Credit Corporation to send relief checks to farmers; however, the CCC’s available funds are low.
Hill writes, “After upcoming payments are made, there will only be an estimated $4 billion left for the Trump administration to spend on any fallout from his newest trade battle.”
The newest round of tariffs include a 10% tariff on Chinese imports imposed this week, which will ultimately make purchasing farm equipment more expensive. Canada and Mexico garnered a pause on a 25% import tariff Trump threatened, but that levy is still possible. Hill explains, “Farmers are warning that their products will be harder to sell if the three countries retaliate with their own tariffs.”
When the CCC was flush with funding, giving farmer bailout checks was a simpler process. This year is different.
“Replenishing [the CCC] could become another sticking point in the bipartisan spending talks happening ahead of a potential mid-March government shutdown,” Hill explains. “With farm-state Republicans expecting federal help from the fund to offset any trade-war impacts on their constituents, Democrats could make their own steep demands in exchange.”
With the Trump administration targeting the country’s three largest agricultural trading partners, farmers could face the harshest consequences.
“Among those raising alarms is the American Farm Bureau Federation, which this weekend detailed the immense fallout for rural America should the trade wars proceed,” Hill reports. “New levies ‘may inadvertently create financial hardships for U.S. farmers and ranchers who are already operating on very thin or negative margins,’ the group’s president and long-time Trump ally Zippy Duvall wrote to the president.”
The Rural Blog is a publication of the Institute for Rural Journalism and Community Issues based at the University of Kentucky.
