More trade-war payments ‘coming very quickly,’ Trump tells farmers

So far, producers have received $10.8 billion to offset the impact of the Sino-U.S. trade war on 2019 crops and livestock, on top of $8.6 billion in cash for 2018 production.

In his third appearance in three years before the largest U.S farm group, President Trump told cheering farmers that they will get a final round of $3.6 billion in trade-war payments despite trade deals intended to spur money-making ag exports. Trump pointed to an upturn in farm income, aided greatly by federal subsidies in 2018 and 2019, and predicted on Sunday, “the big stuff is yet to come.”

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Farm exports to China will triple under the Phase One agreement signed last Wednesday, while the United States-Mexico-Canada Agreement, approved by the Senate on Thursday, “will massively boost exports” to the U.S. neighbors, Trump said during a speech to the American Farm Bureau Federation. Interwoven with Trump’s list of victories in trade negotiations and opening markets abroad were reminders of the billions of dollars sent to farmers to offset the tariffs imposed on other nations in response to Trump’s policy of trade confrontation.

So far, producers have received $10.8 billion to offset the impact of the Sino-U.S. trade war on 2019 crops and livestock, on top of $8.6 billion in cash for 2018 production. A decision whether to release the final tranche of $3.6 billion, depending on market conditions and the state of trade negotiation, was due this month.

“And I am delighted to report that the final installment of those billions of dollars of the money will be coming very quickly,” said Trump, complimenting farmers for their patience during negotiations.

Farmers, who are often social and fiscal conservatives, voted for Trump in landslide numbers in 2016. Trump remains highly popular in farm country, partly because of tax cuts, regulatory relief, and support for corn ethanol. In a 2019 study by the Center for Agricultural and Rural Development, farmers in three Midwestern states said the trade war hit them in pocketbook but they agreed with Trump that it was important to end predatory trade practices by China – seeing it as short-term pain for long-term gain. Most of them said the trade-war payments were helpful.

Ag exports, which generate 20¢ of each $1 of farm sales, are down because of the trade war and low commodity prices. Sales are forecast at $139 billion this year, compared to $143.4 billion in fiscal 2018, when retaliatory tariffs began to bite. China used to be the top customer for U.S. farm goods but now ranks fourth with purchases that are half of their volume before the trade war.

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Some analysts are skeptical that sales to China can be rebuilt quickly, let alone soar to $40-$50 billion a year, the level that the administration says is required by the Phase One agreement. The National Farmers Union, the second-largest farm group, said the trade war “bruised our (U.S.) reputation, making other trading partners reluctant to work with us.” The U.S. International Trade Commission has estimated that trade with Canada and Mexico will grow by 1% under USMCA. The agreement preserves duty-free access to Canada and Mexico for almost all U.S. food and exports. It obliges Canada to remove some barriers to U.S. dairy, poultry, eggs, and wheat.

“We’ll see the proof when $40-$50 billion in orders (from China) come in,” said Agriculture Secretary Sonny Perdue, who spoke to the farm group on Monday. He said there would be no trade war payments for 2020 crops.

Trump said he would sign the USMCA “in a matter of days,” after he returns from the World Economic Forum in Davos, Switzerland. “We’ll have a ceremony, probably in the White House. We also may go to some of the farming communities,” said Trump.

Early in his speech, Trump promised, “We’ll be here next year, too” – a way of saying he expects to be reelected.

The White House transcript of the speech is available here.

To watch a C-SPAN video of Trump’s speech, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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