The Trump administration on Tuesday said it would provide up to $12 billion in aid for U.S. farmers to protect them from the adverse effects of trade disputes between the United States and China, the European Union and others.
Republicans in the U.S. Senate immediately expressed outrage, saying the president was authorizing a “bailout” and “welfare” for those affected by his own misguided tariff plan. They say that Trump’s trade policy is already hurting American farmers but the answer is not a bailout or payoff system. The president’s trade policies have resulted in retaliatory tariffs on agricultural products from China, Canada, Mexico and the European Union.
Trump defended his approach Tuesday during a speech in Missouri, pleading with the public to “be a little patient” and arguing that farmers would eventually be “the biggest beneficiary” of his policies. The White House said farmers will start getting payments in September, and they clearly expect that the unprecedented payoffs will quiet the loud protests which have come from farm groups and GOP officials.
Most Republicans have criticized the administration’s announced aid package, saying the president should stop his trade war. They would rather see the administration help farmers regain their foreign markets instead of offering them government payouts.
“If tariffs punish farmers, the answer is not welfare for farmers. The answer is remove the tariffs,” Sen. Rand Paul (R-Ky.) wrote Tuesday.
“The trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches. America’s farmers don’t want to be paid to lose — they want to win by feeding the world,” added Sen. Ben Sasse (R-Neb.).
“It’s awful. American farmers want markets, not handouts. This is what we feared all along—that this would just turn into more aid programs,” Sen. Jeff Flake (R-AZ).
Sen. John Thune (R-SD) said the Department of Agriculture’s decision is an acknowledgement of the “unintended consequences” and “collateral damage” of Trump’s protectionist policies. Sen. Ron Johnson (R-WI) said Trump was creating a “Soviet type economy” that wouldn’t work and would be inefficient.
Republican Senator Bob Corker of Tennessee issued a statement saying:
“The Trump-Pence tariffs are hurting the American people as they’re now offering welfare to farmers to solve a problem they themselves created.”
“These tariffs are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy. We will continue to push for a binding vote here in Congress to reassert our constitutional role on national security-designated tariffs.”
Former Congressional Budget Office director Douglas Holtz-Eakin (who is a Republican) said the emergency aid for farmers is Trump’s first taxpayer-funded bailout of private entities, which is not a popular concept. He also said it was highly unusual for taxpayers to pay for a bailout when the economy is doing well.
Holtz-Eakin joined other conservative economists who have strongly criticized Trump’s approach to trade. He said Tuesday that Agriculture Department programs were not designed for this purpose.
“This is a terrible idea,” Holtz-Eakin said. “These programs exist to insure farmers against the vagaries of nature and crop cycles. They are not there to offset bad policy. Two wrongs don’t make a right. It’s a misuse of the programs.”
Republicans are clearly afraid they will face a huge backlash from voters in rural areas who are affected by Trump’s trade tariffs which will hurt farmers’ ability to export their products. Several key races for the U.S. Senate will take place in November in states with large industries based on agriculture, such as Missouri, North Dakota and Indiana. If Democrats prevail in all of these states it could determine control of the Senate next year.
Right now Donald Trump thinks he is smart by attempting to solve his political problems by throwing $12 billion of taxpayer money at the trade problems he created. But, based on reactions from Republicans in Congress, he has not solved anything, and may have made his political problems worse.
Bailouts and corporate welfare don’t go over well with conservatives in Washington, nor with conservatives in rural America. It is very likely that with Trump’s latest misguided actions Democrats have increased their chances of taking back control of both houses of Congress.
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