China was a major market for US soybean farmers, but exports have virtually halted amid the year-long trade war (STR)

Washington (AFP) – The United States on Thursday unveiled a new $16 billion aid package to help farmers caught in the crossfire of President Donald Trump’s trade war with China.

Agriculture Secretary Sonny Perdue said the bulk of the funds will go to direct payments to farmers, while a small portion will be used to purchase food to use in US aid programs like food banks and school lunch programs.

“The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” Perdue told reporters in a conference call. 

“Farmers would rather have trade than aid but without the trade they are going to need some support.”

Trump’s aggressive tariff strategy, especially against China, has drawn stiff retaliation from Beijing and others designed to hit the US where it hurts: farm country.

Soybeans and pork have been primary targets, but many other crops have suffered directly or indirectly. 

Soybean exports to China fell 75 percent in 2018, according to Commerce Department figures. 

The Trump administration ramped up the aid from the $12 billion provided last year.

There were high hopes early this month that a resolution with China was within striking distance, but that optimism largely evaporated when Trump said Beijing had backed away from commitments considered already settled.

He more than doubled existing punitive tariffs on $200 billion in Chinese goods, and threatened to hit all the goods that had been spared so far.

“China hasn’t played by the rules for a long time and President Trump is standing up to them, sending the clear message that the United States will no longer tolerate their unfair trade practices,” Perdue said.

The tariffs collected by the US Treasury will indirectly support the farm aid, he said.

The US Department of Agriculture will calculate damage done by the retaliation, and officials said the first of three payments is expected to go out in July or August.

Perdue said the size of the aid will be “heavily skewed” towards the first payment, while the others will depend on the market and the status of the trade talks.

But reaching an agreement now “depends on China.”

USDA officials said the amount each farmer receives will be based on the damage calculated to each US county, with equal payments made to all farmers based on the acreage planted, regardless of crop, to prevent distorting planting decisions.

Crops covered include alfalfa, barley, canola, corn, lentils, rice, peanuts, chickpeas, sorghum, soybeans, sunflower seed and wheat. 

Dairy and pork producers, as well as growers of cherries, cranberries and nuts, also will receive support, officials said.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.