Trump administration farmer bailouts

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Trump administration farmer bailouts are a series of

swing states, such as Iowa, Ohio, and Wisconsin.[1]

Introduction

The Donald Trump administration prioritized unilateral trade in the attempts to alleviate the U.S. from unethical trade practices by China.

Trump administration introduced $16 billion (~$19.1 billion in 2023) of new trade aid.[9][10] In 2019, the Donald Trump administration increased the bailout to $16 billion (~$18.8 billion in 2023).[11]

Problems

US farmers who earned less than $900,000 a year and produced one of the agriculture products suffering from the

US-China trade war could last indefinitely despite problems among US farmers. The bailout's limit of support for a single farmer is $125,000 per person or legal entity. US citizens owning partial shares of a land but not profiting directly from farming could apply for state aid as well. Farmers can apply if they completed the harvest leading to farmers having to wait to complete their crops, making their situation much more uncertain.[12][13]

In North Dakota, public health officials reported a rising number of suicide caused by unpredictable financial conditions amongst, especially young farmers.[14][15][16]

The

food banks or programs for schools. Another part of the bailout is a $100 million program to find new markets for US Farmers.[12]

History

In 1979,

the Soviet Union as a response to the Soviet–Afghan War. But the embargo did not bring any positive effect to the USA. The Soviet Union eluded the embargo by increasing its domestic wheat production and importing from other countries. The Reagan administration lifted the embargo in 1981, but US farmers suffered financially, leading the US government to introduce bailout programs to the dairy industry. Bailouts helped the dairy industry to increase production however the US government had to buy all oversupply . Later the Reagan administration spent $100 million annually to store and transport all dairy oversupply worth $3 billion from the previous administration.[17][12]

Domestic Aid

The United States Department of Agriculture has distributed up to $12 billion in financial aid to agricultural producers most affected by China's retaliatory tariffs. The USDA's aid came in the form of direct cash payments to producers of corn, cotton, soybeans, sorghum, wheat, dairy, and certain meat products.[18] Soybean producers received more payments than any other agricultural producers because of the devastating impact on U.S. soybean exports. Soybean producers received $7.3 billion in payments from the USDA.[18] Since farmers' exports comprise 20% of income, the USDA found it necessary to compensate agricultural producers in response to the decrease in exports.

Bank Sector

Bank sectors serving US farmers reported an increase in late payments. According to the Federal Bank of Minneapolis, the share of bankruptcies had risen by 30%. US farmers' profit decreased by 11% since 2010.

Soybean Sector

US farmers lost access to the critical Chinese market due to

US-China trade war. Chinese import of soybean is worth 110 million tons of soybeans in 2017, and it is mainly used to feed animals. Chinese demand for soybean caused massive growth of US soybean production. In the 1990s, soybeans consist of 450,000 acres of land, and by 2017 the amount rose to 6.4 million. Annual export was worth $26 billion (~$31.8 billion in 2023) annually before 2017.US farmers contributed to funding an organization dedicated to research about the prosperity of US soybeans in China.[14] The export of soybean to Chinafell by 94% in 2017.[19] China increased tariffs on U.S. soybeans to 27%, causing issues as China was the largest importer of American soybeans in 2017. From January to October in 2018, U.S. soybean exports were 63% lower than in the same months of 2017,[7] eventually stopping by November 2018.[20]

Relationships with other countries

China

See also: China–United States trade war

China had been one of the leading importers of US agricultural products.

US-China trade war
, China imported 32.9 million tonnes of US soybean. An outbreak of
African Swine Fever in eastern Asia starting in 2018 led to a lower production of pork products[22] creating substantial import demand, however 62% retaliatory tariffs greatly limited sales from the United States.[1] China, as a member of BRICS, was able to replace US imports with pork imports from other countries, such as Brazil. China-Brazil bilateral trade rose in 2018 to a record $100 billion (~$120 billion in 2023).[23]

Chinese import tariffs on agriculture products[24]
Products Tariff
Fresh fruit, dried fruit and nut products 15%
Wine 15%
Ginseng 15%
Pork products 25%
Soybean[25] 25%

Canada

The Canadian tariffs have been historically limited by quotas, which ensures price stability and farmers' income stability.

the USA and Canada is $620 billion, and the dairy sector consists of only $750 million. Donald Trump wanted to renegotiate these terms as part of renegotiating NAFTA agreement, but Canadian farmers are afraid that this new deal will cost them a lot of money.[26][27]

Canadian import tariffs on agriculture products[27]
Products Tariffs
Milk 270%
Cheese 245%
Butter 298%
American import tariffs on agriculture products[27]
Products Tariffs
Tobacco 350%
Groundnuts 163.8%
Shelled peanuts and oilseeds 131.8 %

During negotiating

tariffs on agriculture products, so Canadian prime minister Stephen Harper decided to scrap the tariffs in exchange for Trans-Pacific Partnership
accession. But when the USA withdrew from Trans-Pacific Partnership, Canada withdrew as well. But Canada has recently signed Comprehensive Economic and Trade Agreement with the European Union, which allows Canadian farmers access without tariffs to the entire European market.[28][29]

European Union

As part of his "America First" Trump targeted the European Union as well. European Union responded with its list of tariffs, which risked escalating into another trade war, howeverJean-Claude Juncker and Donald Trump agreed to stop escalating.[30][31]

European Tariffs on agriculture products[32]
Products Tariff
Sweetcorn 25%
Beans 25%
Rice 25%
Peanut butter 25%
Orange and Cranberry Juice 25%
Tobacco 25%

Japan

With the

NAFTA, and US-European trade relationships, the US looked to Japan for new markets for agriculture products. In 2019 Donald Trump and Shinzo Abe agreed to a trade deal between Japan and the US that would open up markets to an additional $7 billion (~$8.23 billion in 2023) of products, the deal involved Japan buying excess US corn after Japanese crops were damaged by insect pests.[33]

United Kingdom

Due to

Trump administration looked to open up trade deals with the UK, however differences in agricultural practices posed challenges to possible deals.[34]

References

  1. ^ a b "U.S. farmers suffer 'body blow' as China slams door on farm purchases". Reuters. August 5, 2019.
  2. ^ Kerr, William (2020). ""Aggressive Unilateralism"- The New Focus of US Trade Policy". The Estey Centre Journal of International Law and Trade Policy.
  3. hdl:10419/256977
    .
  4. ^ Rushe, Dominic (January 3, 2018). "American farmers worry they'll pay the price of Trump's trade war". Guardian.
  5. ^ "Major U.S. Agricultural Export Markets: China, Canada, and Mexico" (PDF). Farm Credit Administration.
  6. ^ Congressional research Service (January 29, 2020). "Escalating U.S. Tariffs: Timeline" (PDF).
  7. ^ a b Hammond, Keigh (January 29, 2020). "Escalating U.S. Tariffs: Timeline". Congressional Research Service.
  8. ^ Heeb, Gina (Aug 6, 2019). "After series of dramatic escalations, Trump suggests the trade war with China could last until 2020". Business Insider.
  9. ^ "Trump administration unveils $16 billion bailout to farmers hurt by China trade war". CNBC. May 23, 2019.
  10. ^ Meyer, Gregory (Jul 25, 2019). "US increases federal aid for farmers hit by China trade war". Financial Times.
  11. ^ "Trump administration unveils $16 billion bailout to farmers hurt by China trade war". CNBC. May 23, 2019.
  12. ^
    NYTimes
    .
  13. NYTimes
    .
  14. ^ a b "U.S. – China Soybean Industry Relations Are Further Strengthened By Participating in Discussions at Major Industry Events in China". U.S. Soybean Export Council. 30 November 2015.
  15. NYTimes
    .
  16. ^ Ivanova, Irina (Jul 2, 2018). "CDC retracts widely cited study on farmer suicide rates". CBS News.
  17. NYTimes
    . July 31, 1983.
  18. ^ a b "China's Retaliatory Tariffs on U.S. Agricultural Products". Congressional research Services. January 29, 2020. Retrieved March 12, 2021.
  19. NYTimes
    .
  20. ^ "China is officially over American soybeans". 24 December 2018.
  21. ^ "U.S. Agricultural Exports to China". United States Department of Agriculture. 11 May 2017.
  22. ^ Wang, T., Sun, Y. & Qiu, HJ. African swine fever: an unprecedented disaster and challenge to China. Infect Dis Poverty 7, 111 (2018). https://doi.org/10.1186/s40249-018-0495-3
  23. ^ "China says willing to increase agricultural, industrial goods imports from Brazil". Reuters. Oct 25, 2019.
  24. ^ "The full list of 128 US products targeted by China's retaliatory tariffs". Quartz. April 2, 2018.
  25. ^ "China imposes additional tariffs on U.S. products worth 50 bln USD". Archived from the original on April 4, 2018.
  26. ^ Daniels, Jeff (Oct 1, 2018). "Canadian dairy farmers fume that concessions granted". CNBC.
  27. ^ a b c Tasker, John (Jun 12, 2018). "Trump's tearing into Canada's agricultural policy. Does he have a point?".
  28. ^ Krishnadev Calamur (June 11, 2018). "Trump's Beef With Canadian Milk". The Atlantic.
  29. ^ John Barber (Jun 9, 2018). "Why Canadian milk infuriates Donald Trump". Guardian.
  30. ^ "Trump and EU officials agree to work toward 'zero tariff' deal". Guardian. Jul 25, 2018.
  31. ^ "EU Tariffs Take Effect, Retaliating For Trump's Tariffs On Steel And Aluminum". NPR. June 22, 2018.
  32. ^ "All of the EU's anti-Trump tariffs". Quartz. June 22, 2018.
  33. ^ "Trump and Abe herald US-Japan deal in shadow of China trade war". Guardian. Aug 25, 2019.
  34. ^ Phillip Inman (Aug 17, 2019). "A trade deal with Trump will change Britain for the worse". Guardian.
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