The Trump administration is throwing $4.7 billion at US farmers to try and make up for the trade war pain
- The US Department of Agriculture announced the first set of aid to US farmers hurt by President Donald Trump's trade war, totaling $4.7 billion.
- $3.6 billion of the aid will go to soybean farmers who have been hit particularly hard due to China's tariff on the crop.
- The aid is part of a promised $12 billion package to help offset the pain of the trade war.
The US Department of Agriculture on Monday announced the first wave of financial assistance for US farmers hurt by President Donald Trump's trade war.
The initial investment of just under $4.7 billion will be distributed to corn, cotton, dairy, hog, sorghum, soybean, and wheat farmers, who have seen prices dive since Trump kicked off the trade battles with China, Canada, the European Union, Mexico, and more. The money is the first portion of a planned $12 billion aid package.
"Early on, the President instructed me, as Secretary of Agriculture, to make sure our farmers did not bear the brunt of unfair retaliatory tariffs," USDA Secretary Sonny Perdue said in a statement. "After careful analysis by our team at USDA, we have formulated our strategy to mitigate the trade damages sustained by our farmers."
In addition to the direct monetary aid, the USDA will spend $200 million to help American farmers develop overseas markets for their goods.
The largest portion of the assistance, $3.6 billion worth, will go towards US soybean farmers. Soybean prices have nosedived since China announced a tariff on US-grown soybean crops. China imported $14.2 billion worth of US soybeans in 2016, which accounted for nearly 11% of the total value of US agricultural exports that year.
Prices of US agricultural goods have plummeted since the announcement of tariffs on American crops. Since it is harder for US farmers to sell their goods, supply gluts have become worse, driving down prices. This has hurt US farmers even if their goods are not sold directly to the countries with tariffs.
Many countries have targeted US crops with their tariffs to exert not just economic, but also political, pressure on the US, since many farmers are in GOP-held areas won by Trump. For instance, eight of the top 10 soybean-producing states were won by Trump in 2016.
Here's a breakdown of how much each type of producer will get, per the USDA:
- Cotton: $276,900,000
- Corn: $96,000,000
- Diary (milk): $127,400,000
- Pork: $290,300,000
- Soybeans: $3,629,700,000
- Sorghum: $156,800,000
- Wheat: $119,200,000
According to the release, the funds will become available on September 4.