U.S. farmers to receive up to US$12B in trade war relief

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U.S. farmers to receive up to US$12B in trade war relief

Update: Since this article was published U.S. Secretary of Agriculture Sonny Perdue has confirmed the relief measures. His comments can be found below.

The Trump administration will reportedly today announce up to US$12 billion in emergency relief for farmers hurt by the trade war, the New York Times reported.

The move is an effort to insulate food producers from looming financial losses that would be a direct result of the president's trade policies.

The publication said that - according to two people familiar with the plans - the aid would be announced by the United States Department of Agriculture and would come through direct assistance programs.

One program will help with food purchase and distribution while another will be specifically geared toward promoting trade, the article reported.

As part of the initiative to be announced on Tuesday, the USDA is expected to draw on the financial resources of a program known as the Commodity Credit Corporation, which helps shore up U.S. farmers by buying their crops.

The financial relief would not authorize any new money and thus not need approval from Congress, the New York Times reported.

Its announcement would also serve as an indication that Trump has no plans to lift his tariffs any time soon, as senators from across the Farm Belt have pleaded with him to do.

The U.S. recently hit China with tariffs on US$34 billion of goods - a move that was met by retaliatory measures from Beijing, including tariffs on all major fruits exports to the Asian country - and a few days ago Trump threatened tariffs on all US$500 billion of Chinese imports.

Some of fruits to be hardest hit by the trade policies are cherries - which are now facing a 50% tariff going into China - and apples, which have been hit by higher tariffs in China and Mexico, with India set to also implement additional duties next month in response to U.S. duties on steel and aluminium imports.

Northwest Cherry Growers international marketing director Keith Hu this week told Fresh Fruit Portal that the trade war is "definitely impacting" sales from the region to China this season.

Meanwhile, Tarun Arora of India-based importer IG International said he expected the 25% tariff rise on U.S. apples due to be implemented on August 4 to lead to a dramatic drop in volumes to what has this year become Washington State's number-two market.

Update: USDA confirms relief measures

U.S. Secretary of Agriculture Sonny Perdue has officially announced the US$12 billion support measures, saying they are in line with the estimated US$11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods.

“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Secretary Perdue said.

“The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. 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.

"USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”

The USDA will use the Market Facilitation Program - authorized under The Commodity Credit Corporation (CCC) Charter Act - to provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs

Additionally, USDA will use CCC Charter Act and other authorities to implement a Food Purchase and Distribution Program through the Agricultural Marketing Service to purchase "unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs."

The CCC will also use its Charter Act authority for a Trade Promotion Program administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to assist in developing new export markets for farm products.


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