Economy

First came Trump’s tariffs – now the aid for US farmers hit by tariffs

‘If tariffs punish farmers, the answer is not welfare for farmers. The answer is remove the tariffs’

European Commission President Jean-Claude Juncker and US President Donald Trump said they had agreed in talks to 'work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.'

Thu Jul 26 2018 - 04:15

All eyes were on Jean-Claude Juncker's meeting with Donald Trump in Washington on Wednesday. But the tensions between the European Union and the United States were not the only trade issues on the agenda in Washington this week.

On Tuesday the US department of agriculture announced a $12 billion (€10.25bn) package of aid for farmers across America who have been hit by tariffs from China and other economies. The announcement was made as President Trump visited the agricultural-heavy state of Kansas, where he promised that farmers would ultimately be the "biggest beneficiaries" of his policies.

The extraordinary prospect of a Republican president bailing out constituents for a policy that he himself introduced was not lost on his party. Republican members of Congress reacted with fury to the plan.

"If tariffs punish farmers, the answer is not welfare for farmers. The answer is remove the tariffs," Republican senator Rand Paul of Kentucky said on twitter.

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Senator Ben Sasse of Nebraska also weighed in. "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."

The motivation for their push-back is clear – many of the senators who lashed out at Trump represent states that depend on agriculture, or in Paul’s case bourbon, sectors that have been hit by retaliatory sanctions by the EU, China and others.

But their outrage is also based on other reasons. The Republican party has long been the anti-protectionist party, and one that typically keeps a lid on profligate spending. The promise of a $12 billion bailout for farmers challenges both those tenets. Whether this will be the final straw for Republicans who have allowed Trump to upend the principles of their party is another matter.

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