The Washington Post - 22.02.2020

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BY JEFF STEIN,

LAURA REILEY

AND ERICA WERNER

President Trump for the first
time Friday vowed to continue
his multibillion-dollar bailout of
the farm industry, casting aside
recent comments from senior of-
ficials that the program was no
longer necessary because of trade
deals trumpeted by the White
House.
In an all-caps tweet, Trump
pledged to further increase the
size of the bailout program,
which has already cost taxpayers
$28 billion. “IF OUR FORMALLY
TARGETED FARMERS NEED
ADDITIONAL AID UNTIL SUCH
TIME AS THE TRADE DEALS
WITH CHINA, MEXICO, CANA-
DA AND OTHERS FULLY KICK
IN, THAT AID WILL BE PROVID-
ED BY THE FEDERAL GOVERN-
MENT,” Trump said.
His comments appeared to
surprise a number of administra-
tion officials, and they came amid
growing signs that last month’s
partial trade deal with China is
falling far short of the levels
initially promised by the White
House. On Thursday, a s enior U.S.
Department of Agriculture offi-
cial said China might end up
buying just $14 billion in Ameri-
can farm products through the
end of September, meaning the
total sales for the year are likely
to be much less than the $40 bil-
lion Trump had promised.
Trump’s political support
among many farmers appears to
be strong, but White House offi-
cials have long been worried
about a backlash if prices remain
low and bankruptcies continue.
Democrats have been encour-
aged by the electoral inroads they
made during the 2018 midterm
elections, when they defeated
numerous Republican candi-
dates in farm districts.
The USDA said this week that
total farm debt was expected to
reach $425 billion this year, an
all-time high. In 2019, there were
595 Chapter 12 family farm bank-
ruptcies in the United States,
almost 100 more than were filed
in 2018.
There has not been a bump in
commodity prices since Trump
signed the China trade deal or a
separate pact with Canada and
Mexico. Trump recently prom-
ised a huge farming renaissance,
telling farmers to buy a “bigger
tractor” and more land.
“We are frustrated with the
situation. We understand the
broader trade implications but
feel we have been targeted in a
bigger political battle we did not
sign up for,” said Jamie Beyer, a
soybean farmer in Wheaton,

Minn., and president of the Min-

nesota Soybean Growers Associa-

tion. “We are all very excited

about the USMCA and the trade

deal with China. But we are all

waiting for that to be reflected in

commodity prices and orders....

It’s disheartening.”

A third multibillion-dollar

bailout could cast a shadow over

Trump’s boasts about the “big,

beautiful” t rade deal he reached

with China last month, an agree-

ment expected to form a key part

of his 2020 reelection message on

the economy. The outbreak of the

coronavirus has wreaked havoc

on the Chinese economy, making

it more difficult to forecast how

many farm purchases China will

ultimately make this year.

The farm bailout program be-

gan in 2018 as a way to address

fury from farmers who said Chi-

nese tariffs on their exports had

pushed many to the brink of

collapse. The program continued

in 2019, but White House officials

had suggested it would not be

renewed in 2020, until Trump

reversed course Friday.

“Farmers are no dummies.

They’ve seen this get rolled out

the past two years, programs

invented out of whole cloth,” s aid

Roger Johnson, president of the

National Farmers Union. “The

president is going to do whatever

he can to appease the farmers

because it’s an election year.”

The political stakes for the

president are enormous amid

growing economic pain for Amer-

ica’s farmers under his adminis-

tration. Trade wars, weather di-

sasters and low commodity pric-

es have created a farm environ-

ment with far more bank -

ruptcies.

The need for what would

amount to a third round of bail-

out funding highlights the im-

mense challenges Trump has

faced in his international trade

war. In his second year in office,

he imposed tariffs on a range of

Chinese imports, including steel,

as a way to ramp up pressure on

the Chinese government to boost

U.S. imports. But China retaliat-

ed by targeting agricultural pro-

ducers in politically critical Mid-

western states.

Trump has repeatedly said the

bailout would be paid for by

tariffs imposed on foreign na-

tions, a claim rejected by multi-

ple nonpartisan and conservative

budget e xperts. Ta riffs are paid by

U.S. importers and then often

passed along to consumers in the

form of higher prices.

“The president has wanted to

act from the beginning that the

trade war is nothing but rain-

bows and unicorns. The reality is

that it’s n ot just us being tough on

China; China and other countries

are being tough on us,” s aid Rory

Cooper, a former Republican aide

who now works at Purple Strate-

gies, a political consulting firm.

“Trump is trying to spend now

north of $30 billion to paper over

those issues.”

Zippy Duvall, president of the

American Farm Bureau Federa-

tion, said that he was optimistic

that China would purchase more

than $14 billion in agricultural

products, based on conversations

with China’s minister of agricul-

ture, but that the final outcome

was uncertain. “The difficult time

farmers are having today are not

getting any better because of slow

implementation,” Duvall said.

Trump’s pledge of additional

bailout money may be meant as a

signal to China that the White

House will not wait patiently for

Beijing to comply with the new

trade deal, Sen. Kevin Cramer

(R-N.D.), a farm-state ally of the

president, said in an interview.

He called Trump’s promise of

additional bailouts a “sort of a

shot across the bow at our trad-

ing partner” due to the slow

uptick in purchases by the Chi-

nese. Cramer said China’s

pledged purchases of agricultural

commodities were a crucial part

of the trade deal.

While defending the bailout

funding as potentially necessary

to keep farmers afloat, Cramer

acknowledged the frustration

among farmers eager to sell their

products to market rather than

rely on a federal subsidy.

“What happens with subsidies

is it distorts market price,” Cram-

er said. “If there’s n o market, then

having the certainty of an income

is better than not, but it’s still not

the preferred outcome.”

[email protected]

[email protected]

[email protected]

China purchases in doubt, Trump vows new farm bailout

Joe Raedle/getty Images

Soybeans are harvested last fall on a farm near Rippey, Iowa. One soybean farmer said growers are still waiting for a boost from new trade deals: “It’s disheartening.”