The US announced on Tuesday that it will provide as much as $12 billion (€10.26 billion) in emergency relief to ease the pain of American farmers hurt by the retaliatory trade measures taken by Washington's trade partners in response to President Donald Trump's tariffs.
The president was meeting at the White House later Wednesday with European Commission President Jean-Claude Juncker and other European officials as their trade dispute threatens to spread to automobile production.
"This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire USA economy", said Agriculture Secretary Sonny Perdue in a conference call announcing the plans.
The relief package is intended as a temporary boost to farmers as the U.S. and China negotiate over trade issues, officials said.
Short-term: Perdue said the "one-time" program would help farmers dealing with "illegal retaliation" to U.S. tariffs, reports the Wall Street Journal. "Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs", Trump wrote on Tuesday.
Earlier this month, soy farmers in North Dakota told the Bismarck Tribune that they were facing massive losses this year if the president didn't negotiate a deal to reopen Chinese markets to their crops.
The government announced a $12 billion plan Tuesday to assist farmers who have been hurt by President Donald Trump's trade disputes with China and other trading partners.
The Agriculture Department said it would tap an existing program to provide billions in direct payments to farmers and ranchers hurt by foreign retaliation to Trump's tariffs.
Trump declared earlier Tuesday that "Tariffs are the greatest!" and threatened to impose additional penalties on US trading partners as he prepared for negotiations with European officials at the White House.More news: Brazil goalkeeper Alisson makes Liverpool switch
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. If prices do not rebound, Hart estimates Iowa soybean farmers will lose $624 million this year.
"This is an occasion to de-dramatise any potential tensions around trade and engage in an open and constructive dialogue", Juncker's spokesman said on Monday. Beijing's retaliatory tariffs have hit American soybeans and pork.
China is the biggest buyer of USA soybeans, importing more than $12.4 billion worth of the oil seed in 2017, according to the Peterson Institute for International Economics.
But Australia's National Farmer's Federation (NFF) President Tony Maher said it is a blow to drought-stricken farmers in this country.
"This is becoming more and more like a Soviet-type of economy here: Commissars deciding who's going to be granted waivers, commissars in the administration figuring out how they're going to sprinkle around benefits", said Sen.
Automakers and White House officials privately believe Trump is intent on imposing tariffs of up to 25 percent on imported cars and parts despite the nearly unanimous opposition of the auto industry and deep concern among members of Congress. This aid package can be authorized without congressional approval because it uses the Department of Agriculture's Commodity Credit Corporation, a Depression-era program authorized to borrow up to $30 billion in order to "stabilize, support, and protect farm income and prices". Ben Sasse, R-Neb., said that the plan would spend billions on "gold crutches". "They sound nice, but they're rough", he told a convention of Veterans of Foreign Wars.
"The administration must develop a support mechanism that will mitigate the significant damage that is being inflicted upon our most vital worldwide markets for years to come", he said in a statement.
In 2015 countries in the World Trade Organisation agreed to reduce subsidies on agricultural exports, but they are still high in many countries including in Europe and the US.