Trump proposes buying over $15B of U.S. produce for "humanitarian assistance"

May 10 , 2019

With the U.S.'s tariff spike on Chinese goods in effect as of 12:01 a.m. this morning, Trump has suggested how the resulting increase of government funds could be utilized.

In a series of tweets earlier today, he proposed that with part of the "over 100 Billion Dollars in Tariffs that we take in", the U.S. could buy domestic produce and ship it to "poor and starving countries in the form of humanitarian assistance".

"If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else," he said on Twitter.

Critics were quick to point out that it is not China who will pay the taxes, but U.S. importers, with the increasing costs of Chinese goods likely being passed down to consumers.

Deborah Elms, executive director at the Asian Trade Centre, was quoted as saying by BBC News: "Even though Mr Trump has downplayed the impact of tariffs on the US economy, the rise is likely to affect some American companies and consumers.

"Those are all US companies who are suddenly facing a 25% increase in cost, and then you have to remember that the Chinese are going to retaliate."

Financial Trade's expert Alan Beattie also weighed in, replying on Twitter that dumping cheap products on developing nations can cause serious economic harm.

In a tweet responding to President Trump, he called the plan a "return to large-scale agricultural dumping in the guise of food aid" and a "proven way of undercutting farmers and destroying local markets in developing countries".

He added: "You would do less damage just chucking the stuff overboard in the middle of the Atlantic.

"Generally what happens is there's a food crisis in, say, sub-Saharan Africa, a grain ship chugs out of Baltimore or wherever (shippers and ports being part of the US food aid lobby btw) & arrives several weeks later just in time to undercut local markets as they start to recover."

Meanwhile, although the Trump administration passed a US$12 billion support package last year to help farmers affected by the trade fight, it had previously ruled out new assistance for this year.

During a visit to Minnesota on Thursday, however, U.S. vice president Mike Pence claimed a new aid package was being discussed.

Such financial help could be greatly beneficial as China maintains what the South China Post calls "its tough stance in the trade war".

The publication added that the country has vowed to implement the “necessary countermeasures” in response to the U.S.’s decision to increase tariffs. It is not yet clear how China would retaliate.

As for Trump's comments on the ongoing trade negotiations, he tweeted: "Talks with China continue in a very congenial manner".

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