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Administration Earmarks Up to $12 Billion for Agriculture to Offset Trade War

25 July 2018

Trump noted he would be meeting today with European officials, including European Commission President Jean-Claude Juncker.

The same day that President Donald Trump gushed on Twitter that "tariffs are great", his administration disclosed plans to pay billions in aid to U.S. farmers getting slammed by tariffs on their goods, a new report said Tuesday. Rural and agricultural states supported Trump by wide margins in the 2016 election. Tammy Baldwin also wrote Trump, saying tariffs are hurting the state's agriculture economy. Fall is the biggest season for American soybean farmers. House Speaker Paul Ryan of Wisconsin said lawmakers are making the case to Trump that tariffs are "not the way to go". Mike Rounds, R-S.D., said of the farmers in his state.

"However, our concerns still lie in a lengthy trade war that will cause long-term, irreparable harm to USA agriculture", the statement reads.

Agriculture officials say the plan will not require congressional approval.

The administration's action appeared to divide Republicans, with some praising the move and others troubled by what they view as the kind of widespread government-assistance programme their party has traditionally opposed.

Donald Trump heard an earful on Tuesday from senators in his own party after his administration pledged to provide up to $12 billion in aid for USA farmers to shield them from the effects of trade disputes cultivated by the White House itself. The U.S. and European allies have been at odds over Trump's tariffs on steel imports and are meeting as the trade dispute threatens to spread to automobile production. Those affected economies have in turn targeted US agricultural products, including soybeans, dairy, meat, produce and liquor.

The president, meanwhile, pushed his $12 billion plan at a speech in Kansas City before the Veterans of Foreign Wars, just hours after he assured Americans that his own Republican colleagues were mistaken about tariffs.

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He criticized the media's use of anonymous sources and publishing reports "without ever asking me". After that summit, Trump said Kim had pledged to dismantle a missile site.

Agriculture is the rare American industry that runs a trade surplus, with a projected $21 billion this year.

Trump's tweet comes after his administration already imposed $34 billion on Chinese imports and targeted an additional $16 billion goods. "Importantly, the USDA intends to use a Trade Promotion Program to develop new export markets for American agricultural products. It is critical the administration work to secure agreements with Japan and other TPP member nations that reflect critical markets for Nebraska farm and ranch families".

The news lifted shares of farm equipment companies on the prospect that farmers will have more money to spend on tractors and other farm gear.

Stock options trading in Deere and Caterpillar also saw a burst of activity in the 30 minutes before the news broke, according to a Reuters analysis of Trade Alert data. "As his aides work to keep him insulated from the outside world, Mr. Trump is doubling down in his efforts to tell supporters to trust him over the words of critics and news reports".

The White House will have no choice but to attempt a spin of the facts with the program.

Senators said the aid package could help short-term, but they're anxious about losing long-term access to export markets. "They are a very temporary bandage to a self-inflicted wound". Trump said. "Hope they do it, we are ready - but they won't!" he said. He added that, "Tariffs are taxes".

Kevin Cramer, a USA representative trying to unseat Democrat Senator Heidi Heitkamp in North Dakota, praised the move. But as he deepens the United States involvement in trade fights, it raises questions on whether American consumers will feel the pain of retaliatory tariffs, and whether the president will incur a political price for his trade policies in the midterm elections.

Administration Earmarks Up to $12 Billion for Agriculture to Offset Trade War