Trump Vows Farmers to Be `Better Off' Because of Trade Fight
(Bloomberg) -- President Donald Trump promised U.S. farmers that they will emerge from a trade dispute with China better off despite threats from Beijing to impose tariffs targeting American agricultural products.
“There’ll be a little work to be done, but the farmers will be better off than they ever were,” Trump told reporters Monday during a cabinet meeting at the White House.
China last week announced $50 billion worth of tariffs on American products including soybeans and pork in retaliation for Trump’s plan to impose duties on 1,333 Chinese products. The biggest potential impact will be in rural areas that long have been part of the Republican base. Eight of the 10 biggest soybean-producing states went for Trump in the 2016 election and three of those will feature close Senate races in November.
The Chinese “hit the farmers specifically because they think that hits me,” Trump said Monday.
“I wouldn’t say that’s nice, but I tell you our farmers are great patriots,” Trump added. “They understand that they’re doing this for the country. We’ll make it up to them.”
Agriculture has formed part of the bedrock of the president’s support, but economic pressures are growing. Farm profits may reach a 12-year low in 2018, according to a forecast the U.S. Department of Agriculture released before the Chinese tariff threat.
Soybeans, the second-most valuable U.S. crop after corn, would be especially hard-hit -- exports to China accounted for more than one-third of the oilseed’s revenue last year. Farmer organizations including the American Soybean Association have called the impacts of tariffs on agriculture "devastating," even as farmers who are supporters of the president have taken a more wait-and-see approach.
When he announced additional possible tariffs last week, Trump directed the Agriculture Department for specific actions to help farmers. Agriculture Secretary Sonny Perdue on Monday declined to give details in a speech to a rural lobbying group in Washington.
"The president isn’t going to lay all his cards on the table, and neither am I," Perdue said.
One possible option, according to Steve Censky, deputy secretary of the USDA, could be using the department’s authority under the Commodity Credit Corporation, a federal entity that funds farm subsidies, to buy surplus U.S. crops.
Using such authority to intervene in markets is rare, but not unprecedented. Under President Barack Obama, the USDA bought surplus pork to keep up prices during a drought that caused producers to send animals to slaughter early, boosting supply.
“We have a pretty broad authority” to purchase surplus crops, Censky said at a conference of agricultural journalists in Washington. He previously was the head of the soybean association that’s now protesting the administration’s stance toward China.
Senator Pat Roberts, the Kansas Republican who is chairman of the Senate Agriculture Committee, told reporters that the need for aid to protect farmers in a trade war with China may be beyond the scope of the USDA’s ability to administer assistance.
"I don’t know how you would work that," Roberts, a critic of Trump’s aggressive trade approach, said. He added that he’s been invited to meet with the president on Thursday, an indication that Trump knows the stakes of a trade war for some of his most loyal voters.
"The White House understands what’s going down in small towns and rural America on trade," Roberts said.
©2018 Bloomberg L.P.