Farmers remain critical of tariffs as US offers billions in aid | Business| Economy and finance news from a German perspective | DW | 25.07.2018
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Farmers remain critical of tariffs as US offers billions in aid

The Trump administration has offered to provide billions of dollars in emergency relief to American farmers affected by tariffs and trade tensions. But many farmers and lawmakers seem to disagree with Trump's approach.

The US announced on Tuesday that it will provide as much as $12 billion (€10.26 billion) in emergency relief to ease the pain of American farmers hurt by the retaliatory trade measures taken by Washington's trade partners in response to President Donald Trump's tariffs.  

The Agriculture Department said that it would make compensatory payments to producers of soya, sorghum, maize, wheat, cotton, dairy and pork, and buy surpluses of commodities including fruits, nuts, rice, legumes, beef, pork and milk.

The measures are a response to an estimated $11 billion in "trade damage from unjustified retaliation," the agency said.

Read more: In the Trump era, can the concept of 'free trade' survive?

Agriculture Secretary Sonny Perdue said he was acting at President Trump's direction to provide a "short-term solution" to farmers and give the administration time to negotiate a longer term trade deal to help agriculture and other sectors hurt by unfair trading practices by China and others.

The department "will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations," he said. Administration officials, however, deny that the plan is a bailout.

Mixed reactions

The response to the announcement was mixed, with many legislators criticizing the plan, calling it "welfare for farmers," and farm groups pleading for a more lasting solution.

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Carmakers on edge over possible US tariffs

Some Republicans in farm states quickly dismissed the plan, declaring that farmers want markets for their crops, not payoffs for lost sales and lower prices. They also argue that the move would open a Pandora's box for other sectors of the economy.

"I want to know what we're going to say to the automobile manufacturers and the petrochemical manufacturers and all the other people who are being hurt by tariffs," said Senator John N. Kennedy, a Republican from Louisiana. "You've got to treat everybody the same."

Senator Ben Sasse, a Republican from Nebraska, said the plan would spend billions on "gold crutches," adding, "America's farmers don't want to be paid to lose — they want to win by feeding the world. This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again."

And Senator Rand Paul tweeted, "Tariffs are taxes that punish American consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs."

Mark Martinson, who raises crops and cattle in north-central North Dakota and is president of the US Durum Growers Association, said the $12 billion figure "sounds huge" but there are many farmers in need. "I don't think this will cover us for a very long time — and it might not even buy me a tank of diesel. I think it will only put out the fire a little bit."

"We are just kind of being played," said Tom Giessel, who was cultivating his fields when he stopped his tractor to take a cell phone call from a reporter seeking his reaction to the plan.

Giessel, who grows wheat and corn near the western Kansas community of Larned, said he was "glad they are trying to be doing something, but I don't know when the day is over how much difference it is going to make. The underlying problem is still there."

Read more: Germany, China seek closer alliance over trade spat with US

Escalating trade rows

The government's action points to administration concern about damage to US farmers from Trump's trade tariffs and the potential for losing House and Senate seats in the Midwest and elsewhere. The program is expected to start taking effect around Labor Day in the US on September 3.

Trump has in recent months engaged in a multi-front trade confrontation, imposing steep tariffs on steel, aluminum and tens of billions of dollars in Chinese goods, which sparked swift retaliation against key US farm products like soy and pork.

He defended his aggressive stance again on Tuesday, saying it was bringing other governments to the negotiating table.

European Commission President Jean-Claude Juncker is due to meet with Trump on Wednesday, a day after the US president called the European Union a "big abuser" of trade relations. Trump has also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

Watch video 01:06

Merkel determined to resist US tariffs

sri/tr (AP, AFP, dpa)

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