Feds Eye $30 Billion Fund
for Farmers Affected by Trade

President Donald Trump’s trade war was officially launched at 12:01 a.m. Friday. Work had begun before then to strategize about how to use emergency funds to mitigate the damage to farmers.

The Trump administration officially levied tariffs on $34 billion worth of Chinese products at the start of the battle. China announced its own comparable tariffs on $34 billion of U.S. goods.

The Chinese tariffs, including a 25 percent charge on soybeans, are expected to hit U.S. farmers particularly hard, since the country currently buys nearly two-thirds of the soybeans produced by U.S. farmers.

But Trump says he intends to save farmers from the trade war he launched.

Agriculture Secretary Sonny Perdue has suggested the Commodity Credit Corporation is a tool he’s considering to comply with Trump’s instructions to craft a strategy to support U.S. farmers against retaliatory tariffs.

The program, which started during the Great Depression, allows the Agriculture Department to borrow as much as $30 billion from the U.S. Treasury to buy crops from farmers that would go unsold in a trade war.

Rep. Collin Peterson (D-Minn.), the ranking Democrat on the House Agriculture Committee, has said using the funds would set a bad precedent by politicizing farm payments, Bloomberg reported.

“I am against a one-time bailout of a situation created by the administration,” Peterson said. Farmers “want their markets left intact and not screwed up by some policy. Giving them money isn’t necessarily going to buy them off.”

Critics say tapping the fund would be a significant expense just as the U.S. debt is on track to be the biggest in history after corporate tax cuts and spending hikes.

Former USDA chief economist Joseph Glauber characterized the move as “the government coming up with some balm to spread over wounds that are self-
inflicted. It seems to be a huge moral hazard problem.”

Source: Huffington Post