Products using soybeans are sold at a store in Beijing on May 7. The Trump administration said it was authorizing up to $12 billion in assistance programs for U.S. farmers to offset losses from retaliatory tariffs on agricultural products, like soy, from China. File Photo by Stephen Shaver/UPI | License Photo
July 24 (UPI) -- The Trump administration on Tuesday announced up to $12 billion in aid to U.S. farmers hurt by what it described as "unjustified" retaliatory tariffs on U.S. agricultural goods.
The U.S. Department of Agriculture said the amount is in line with the $11 billion estimated impact of tariffs. The funds will go toward programs to assist farmers for losses associated with the tit-for-tat tariffs.
"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 U.S. economy," USDA Secretary Sonny Perdue 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 illegal retaliatory tariffs."
On July 6, China imposed $50 billion in tariffs on American exports, which includes a 25 percent tariff on soybeans. The move was retaliation for tariffs the United States placed on Chinese goods, mostly targeting the aerospace, robotics and machinery industries.
The USDA said retaliatory tariffs were disproportionately targeted directly at U.S. farmers, impacting sales of soybeans, sorghum, milk, pork, fruit and nuts.
Speaking Tuesday at a Veterans of Foreign Wars convention in Kansas City, Mo., before the aid was announced, Trump told supporters the United States has "just put up with" what he described as imbalanced tariffs.
"We're making tremendous progress," he said. Other countries "don't want to have those tariffs put on them.
"And the farmers will be the biggest beneficiary," Trump added. "Watch. We're opening up markets. You watch what's going to happen. Just be a little patient."
Since the tariff was enacted, the price for U.S. soybeans has dropped roughly 20 percent, said Chad Hart, an economist at Iowa State University. If prices do not rebound, Hart estimates Iowa soybean farmers will lose $624 million this year. Across the Midwest, economists at Purdue University estimate farmers' losses will exceed $3 billion.
China is the world's single largest importer of soy, and it buys roughly 30 percent of all U.S. soybeans. The tariff, which is a tax Chinese buyers pay the government to purchase the commodity, ensures Chinese buyers will buy from other countries.
Republicans criticized the Trump administration's aid program, calling on him to instead reverse tariffs.
"This is becoming more and more like a Soviet-type of economy here. Commissars deciding who should be granted waivers. Commissars in the administration trying to figure out how they're going to sprinkle around benefits," Sen. Ron Johnson, R-Wis., told Politico.
"Farmers actually want the free-market system to work as best as possible and they want access to these overseas markets," he added. "I'm very exasperated. This is serious."
Sen. Ben Sasse, R-Neb., agreed, calling the aid "trade-war bailouts."
"This 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. This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again," he said.
Sen. John Hoeven, R-N.D., expressed hope for better trade deals in the future.
"The objective is not to have a long-term relief program. The objective is to get access to the markets on a fair basis for our farmers and ranchers," he said.
Jessie Higgins contributed to this report.