Punishing Chinese tariffs that prompt painful retaliation. American farmers on the brink of bankruptcy. A multibillion-dollar bailout to keep farmers afloat.
It is 2018 all over again as the Trump administration prepares to address the same policy crisis it faced seven years ago when President Trump, who imposed stiff tariffs on Chinese imports, had to shield the U.S. agriculture industry from the fallout of his trade war.
Mr. Trump has once again hit China with tariffs in his second term, eliciting the same economically painful retaliation by Beijing. As a result, the Trump administration is expected to unveil another round of economic support for farmers as soon as Tuesday. The scale and mechanics of the bailout remain unclear, but the crisis is even more urgent as China, the biggest buyer of American farm products, has drastically scaled back purchases of U.S. crops this year.
“I’m going to do some farm stuff this week,” Mr. Trump said at the White House on Monday.
The need for federal farm aid demonstrates the limits of Mr. Trump’s trade agenda, which relies on tariffs to gain leverage in trade negotiations that are intended to open up markets to U.S. exports. Instead, the tariffs have pushed up costs for American farmers, who are facing higher prices for fertilizer and equipment. At the same time, they have lost their biggest customer.
“We have an export-dependent industry, we’ve angered its biggest customer, and, boom, now we’re bailing out the export-dependent industry,” said Scott Lincicome, the vice president for general economics at the Cato Institute, a libertarian think tank. “It’s kind of a slow-motion train wreck six years in the making.”
Farmers have long been a reliable voting bloc for Mr. Trump, making them a rich target for retaliation. In Mr. Trump’s first term, China hit back at his tariffs by imposing its own levies on U.S. whiskey, cranberries, pork and soybeans. The fallout was so painful that the administration delivered more than $20 billion in aid to farmers.
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