Trump offers farmers US$16b bailout
President Donald Trump is delivering another US$16 billion in aid to farmers hurt by his trade policies, an effort to relieve economic pain among his supporters in rural America and another sign that the United States-China trade war likely won’t end anytime soon.
US Agriculture Secretary Sonny Perdue said the first of three payments is likely to be made in July or August. He suggested it was unlikely a trade deal would be done by then, a sign that US negotiators could be months away from settling a bitter trade dispute with China.
“The package we’re announcing today ensures that farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” Perdue said.
The latest bailout comes atop US$11 billion in aid Trump provided farmers last year.
Trump, seeking to reduce America’s trade deficit with the rest of the world and with China in particular, has imposed import taxes on foreign steel, aluminium, solar panels and dishwashers and on thousands of Chinese products.
US trading partners have lashed back with retaliatory tariffs of their own, focusing on US agricultural products in a direct shot at the American heartland, where support for Trump runs high.
William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former US trade official, called the administration’s aid package for farmers “a fairly overt political ploy”.
“It’s not economics,” Reinsch said. Trump wants win the farm states again in the 2020 election, “and he’s got members of Congress beating up on him” to resolve the trade conflicts.
Financial markets buckled Thursday on heightened tensions between the US and China. The Dow Jones industrial average was down more than 400 points in afternoon-day trading.
US crude plunged six per cent on fears that the trade standoff could knock the global economy out of kilter and kill demand for energy.
Talks between the world’s two biggest economies broke off earlier this month with no resolution to a dispute over Beijing’s aggressive efforts to challenge American technological dominance. The US charges that China is stealing technology, unfairly subsidizing its own companies and forcing US companies to hand over trade secrets if they want access to the Chinese market.
Trump and Chinese President Xi Jinping are expected to discuss the standoff at a meeting of the Group of 20 major economies in Osaka, Japan, next month. There are no current plans for talks to occur before then.