Washington: The Trump administration today announced a whopping USD 12 billion in financial assistance to American farmers hit by retaliatory tariffs imposed by trading partners like China, India and the EU.
Farmers in the US have been adversely impacted after the Trump administration imposed tariffs on aluminium and steel imports, triggering a trade war with several countries including China, which has announced retaliatory measures against American goods.
Being described as a short-term solution, the US Department of Agriculture (USDA) will authorise up to USD 12 billion in programmes, which is in line with the estimated USD 11 billion impact of the unjustified retaliatory tariffs on US agricultural goods.
These programmes will assist agricultural producers to meet the costs of disrupted markets.
"This is a short-term solution to allow President (Donald) Trump time to work on long-term trade deals to benefit agriculture and the entire US economy," Agriculture Secretary Sonny Perdue said.
Trump promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong, he said.
Unfortunately, America's hard-working agricultural producers have been treated unfairly by China's illegal trading practices and have taken a disproportionate hit when it comes to illegal retaliatory tariffs, he said.
China cancelled nearly USD 140 million in soybean contracts at the end of June, according to US lawmakers. Cherry producers also felt the pinch during their short cherry season, as they face an additional 25 per cent tariff in China.
India last month submitted a revised list of 30 items -- including motorcycle, certain iron and steel goods, boric acid and lentils -- to the World Trade Organization (WTO) on which it proposes to raise customs duty by up to 50 per cent. In May, India notified the WTO that it plans to raise its tariff before June 21 on apples from the already very high level of 50 per cent to 80 per cent.
The European Union (EU) has also announced tariffs on American imports.
"The USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programmes we are announcing today help ensure our nation's agriculture continues to feed the world and innovate to meet the demand," Perdue said.
Of the total unjustified retaliatory tariffs imposed on the US, a disproportionate amount was targeted directly at American farmers, the Department of Agriculture said.
Trade damage from such retaliation has impacted a host of US commodities, including field crops like soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts and other specialty crops, it said.
High tariffs disrupt normal marketing patterns, affecting prices and raising costs by forcing commodities to find new markets.
Additionally, American goods shipped overseas are being slowed from reaching market by unusually strict or cumbersome entry procedures, which can affect the quality and marketability of perishable crops, it said.
"He (Trump) understands the farmers in this country feed us, they fuel us, they clothe us and he'll do everything he can to protect them. He is working with the Department of Agriculture to protect them and he'll keep doing that," White House Deputy Press Secretary Hogan Gidley told reporters during Air Force One Gaggle.
Senate Democratic Whip Dick Durbin said "the bailouts, tweets, and bragging won't save the lost crop value for our farmers and won't protect their reputations around the world as reliable sellers."
"The president's scorched earth trade war has put a lot at stake for Illinois and our rural economy. Soybean farmers in Illinois tell me that since the start of the president's trade war, they've seen their crop value drop by 20 per cent.
"Declaring a trade war on the world, instead of the truly bad actors, leaves a lot of collateral damage," Durbin added.