Trump Administration Considering at Least $10 Billion for Farmer Aid

The Wall Street Journal's Brian Schwartz, Patrick Thomas and Natalie Andrews reported that "President Trump is considering providing $10 billion or more in aid to U.S. farmers as the agriculture sector warns of economic fallout from his far-reaching tariffs, according to people familiar with the discussions.”

"The President and his team are weighing using tariff revenue to fund much of the aid, the people said, adding that distribution of the money could start in the coming months," Schwartz, Thomas and Andrews reported. "A senior administration official said the discussions have centered on $10 billion to $14 billion in aid. The aid likely would go toward helping soybean producers, as well as other parts of the farm economy. The official stressed that the deliberations were ongoing and that nothing had been definitively settled."

“President Trump and Secretary Rollins are always in touch about the needs of our farmers, who played a crucial role in the President's November victory,” said Anna Kelly, a White House spokeswoman, referring to Agriculture Secretary Brooke Rollins." “He has made clear his intention to use tariff revenue to help our agricultural sector, but no final decisions on the contours of this plan have been made,” Kelly added."

"When Trump placed tariffs on China during his first term, Chinese imports of U.S. soybeans plummeted, devastating farmers' balance sheets," Schwartz, Thomas and Andrews reported. "The U.S. Agriculture Department has estimated that soybean growers accounted for more than 70% of the financial losses incurred by farmers during Trump's first trade war. The government sent about $23 billion to farmers to compensate. While soybean exports recovered in the following years, China has been squeezing American farmers out and has spent heavily to improve the agriculture supply chain in South American countries, such as Brazil, to fill the gap."

Treasury's Bessent Says Aid Announcement Coming Early Next Week

Agri-Pulse's Oliver Ward reported that Treasury Secretary Scott Bessent said recently that U.S. farmers could see an announcement on a substantial support package as soon as this week to deal with the fallout from the trade tensions with China.

“It's unfortunate that Chinese leadership has decided to use American soybean farmers as a hostage or pawn in the trade negotiations,” Bessent told CNBC. “You should expect news soon on substantial support for our farmers," Ward reported. "Soybean farmers have been warning of a dire financial situation in farm country if China continues its freeze on U.S. purchases. Chinese buyers have not yet placed any orders for the new U.S. crop, and Chinese officials have suggested they won't until the U.S. removes some tariffs.”

Bessent also demonstrated his understanding of some of the knock-on impacts of China's retreat from U.S. ag. “This is a record harvest,” Bessent pointed out. “The harvest is so big that we may run out of storage. So that's also affecting prices.” In addition to providing tariff support, Bessent said the administration would work to make sure that the farmers have what they need for next planting season.

Bessent also previewed a big breakthrough in U.S.-China trade talks once Trump and Chinese President Xi Jinping meet in Korea at the end of the month.

President Donald Trump said that soybeans would be a major topic of discussion when he meets with Chinese President Xi Jinping in coming weeks. “The soybean farmers of our country are being hurt because China is, for negotiating' reasons only, not buying,” Trump wrote on Truth Social.

Last month, Trump said he and Xi agreed during a call to meet face-to-face in South Korea to discuss a trade conflict that has kept the countries bitterly at odds. The two leaders are set to meet on the sidelines of the Asia-Pacific Economic Cooperation forum during the last week of October in Gyeongju, South Korea.

EDITOR’S TAKE:

China’s purchase of U.S. soybeans has basically fallen to zero in recent months. They have instead turned to Argentina and Brazil as their top suppliers. This, even though Chinese buyers said they prefer the higher quality U.S. soybeans. In the past, China has been the largest importer of our soybeans than any other country by far. That is the primary rationale for the Trump administration’s consideration of monetary support to help the soy producers who are caught in the crosshairs of the tariff dispute between the two countries.

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