On Thursday US President Donald Trump unveiled a massive aid package for struggling farmers, besieged by fallout from a trade war with China on top of flood-related setbacks.
The $16 billion bailout is intended to soften the blow of Beijing’s tariff retaliation, which targeted the agricultural industry that depends on exports to China.
It is the second attempt to “ensure farmers will not bear the brunt,” as Agriculture Secretary Sonny Purdue put it on Thursday, following a $12 billion handout last year.
Also on Thursday, the New York Federal Reserve released new figures estimating how much the Trump administration’s tariffs on Chinese goods will cost US consumers.
The research found that an average household will pay $831 this year due to the increased tariffs, a total annual cost of more than $100 billion across the country.
The economists concluded that the higher tariffs “are likely to create large economic distortions and reduce US tariff revenues.”
In his remarks announcing the aid package at the White House, Trump praised farmers for what he said was their support for the trade confrontation with Chian.
“You could say with our farmers – they’re patriots. They stood and they were with me. They didn’t say ‘oh, you shouldn’t do this because we’re going to have a bad year’ – because they’ve had 20 bad years if you really look if you take a look at those charts, way back, longer than that. It’s just been a steady spiral down,” he said.
“It’s a good time to be a farmer. We’re going to make sure of that.”
Unfortunately for the business owners, many of whom say the government subsidies are barely helping their operations break even, the pain inflicted by the trade war has been exacerbated by unprecedented flooding.
According to a report in The Wall Street Journal on Thursday, the past 12 months were the wettest in recorded history.
The Trump administration did manage to provide some modicum of relief from trade conflicts last week when an agreement was made with Canada and Mexico to lift tariffs on steel and aluminum imports in exchange for the lifting of retaliatory tariffs, many of which were placed on agriculture products.
But the prospects for a ceasefire in the conflict with China are looking increasingly grim, despite widespread optimism just several weeks ago.