Donald Trump bypasses Congress to give US$20 billion to farmers hurting from US-China trade war

 

·         Turning to obscure 1940s law, president seeks to shore up support in rural states ahead of 2020 election

·         Move resembles strategy Trump used to shift millions of dollars meant for US military to pay for sections of his border wall

 

Tribune News Service

via South China Morning Post (China) - 28 Nov, 2019

 

Moving to offset the impact his trade war has had on rural America, US President Donald Trump has bypassed Congress to send some US$20 billion in aid to farmers, mostly going to a bundle of states that are essential to his re-election chances next year.

 

The payments have ranged from as little as US$2 for some small-scale farmers to more than US$1 million each for some corporate agricultural enterprises.

 

To sidestep Congress, which has long considered price supports for farmers its exclusive domain, the administration cited an obscure law from the 1940s that was passed in the aftermath of the Dust Bowl and the Great Depression.

 

Until Trump, no president had ever used that law to make direct payments to farmers, let alone tens of billions.

 

The strategy bears some resemblance to the one Trump used to shift millions of dollars that Congress appropriated for the military to pay for sections of his border wall.

 

Unlike the border wall money, however, the farm aid has not drawn challenges from Congress, perhaps because Democrats have their own political reasons for not wanting to oppose help for rural areas in politically important states.

 

The payments are likely to reach nearly US$25 billion by early next year, making them roughly twice the net cost to taxpayers of former president Barack Obama’s car industry bailout during the recession of 2008.

 

Even so, they may fall short of fully covering farmers’ losses from the trade war with China or fully mitigating the political fallout Trump has faced in some Midwestern communities.

 

It is not that farmers are in open revolt against Trump. Surveys and interviews suggest most are sticking with him and hoping for the best. But the trade war’s impact – especially the uncertainty about future policies – could dampen enthusiasm come Election Day next year.

 

“Turnout is the key question: are they just going to stay home or are they going to vote for Trump?” asked Katherine Cramer, a political-science professor at the University of Wisconsin who has researched rural attitudes and the political and cultural divide between rural and urban Americans.

 

If farmers feel too pinched by the trade conflict, “the greatest impact will be a lack of enthusiasm – and they’ll stay home and not vote – which could make a huge difference”, she said.

 

For farmers, the cost of the trade war can be measured in lost markets in China, which has been by far the largest buyer of the soybeans and other grain crops that are the lifeblood of agriculture across the Midwest and Great Plains.

 

US sales of soybeans to China exceeded US$14 billion in 2016, but prices fell as trade tensions mounted. Soybean exports to China plunged to US$3.1 billion last year.

 

Early last month, Trump announced that he and Chinese President Xi Jinping would soon be signing a “phase one” agreement in which China would buy US$40 billion to US$50 billion of US farm goods a year, about double the annual amount before exports to China plummeted last year.

 

That has not happened.

 

And some farmers say they are wearying of Trump’s on-again, off-again rhetoric, with its still-unfulfilled promises of an imminent end to the conflict with Beijing.

 

Some farmers worry that China is developing new supply chains in Brazil, Argentina and elsewhere that may be hard to break even if the trade war ends.

 

Scott Henry of Nevada, Iowa, a small town roughly 64km (40 miles) north of Des Moines, backed Trump in 2016. And the 29-year-old, third-generation corn and soybean grower has not given up on the president yet. Neither is he certain to vote for him.

 

“Trump has done just enough with tax policy and business regulations to keep people” supportive, he said.

 

But, he added, “I have no confidence that we’ll actually get anywhere on trade. What we’ve learned is there’s a lot of talk from this administration and very little action.”

 

Trump has “bought some votes from farmers” with the added farm spending, he said, adding that he is a little troubled by the scale of the expense...

 

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https://www.scmp.com/news/world/united-states-canada/article/3039671/donald-trump-bypasses-congress-give-us20-billion