Rural communities warned President Donald Trump that his unilateral trade war with the rest of the world would devastate farms, but Trump didn’t listen. Now, farmers face billions of dollars in losses, and the president is promising a bailout. However, the federal accounts built to aid farmers are low, and Trump needs a cash infusion to match his promises. He needs Congress — but Congress should not bail out his trade war. Instead, it should push the president to end his tariff campaign, which would put the economy on a more stable footing.
We have seen a version of this movie before. In Trump’s first term, he slapped a 25% duty on most imports from China. China retaliated by cutting soybean imports from the United States, replacing them with beans from Brazil. American farmers lost billions of dollars, and Trump bailed them out $28 billion from the Commodity Credit Corporation. Congress then replenished the corporation’s account.
Recommended Stories
- The FBI’s righteous divorce from activist propaganda
- The National Defense Strategy must continue to prioritize China
- The talented Mr. Roberts on ICE
Now, again, farmers are warning Trump that a trade war with China would hit their bottom line. The American Soybean Association released a statement saying, “Trade retaliation will create financial hardships for U.S. farmers, ranchers, growers, and agribusinesses who are already operating on very thin or negative margins.”
The global nature of Trump’s second-term trade war means farmers face hardships on two fronts: They will lose markets for their products, and his tariffs have also raised the cost of fertilizer and equipment. American farm produce now costs more than consumers are willing to pay.
Treasury Secretary Scott Bessent said last week that the administration could take action to bail out farmers as soon as Tuesday. But there is, reportedly, only $4 billion left in the CCC’s account. The White House reportedly wants to direct more money to soybean farmers, whose sales to China have dropped to zero. In a normal year, China buys almost a million bushels of soybeans from the U.S. for just over $12 billion. Republicans in Congress are reportedly talking about $35 billion to $50 billion for all farmers affected by the tariffs.
The nightmare for taxpayers and consumers is that Democrats and Republicans get together and add hundreds of billions of dollars to federal deficits. Democrats in Congress have shut the government down over $622 billion in new spending they want for Obamacare and Medicaid. One could see Trump striking a deal in which Democrats agree to bail out farmers and Republicans agree to bail out health insurance companies. It would be a win-win for politicians and a loss for taxpayers.
Trump’s tariffs have sluiced $200 billion into the Treasury, which has kept a lid on federal borrowing. The federal government ran a surplus this June for the first time in 20 years. But spending on farm and insurer bailouts would force the Treasury to borrow hundreds of billions more, driving up interest rates and inflation while Trump is urging the Federal Reserve to bring them down.
THE TALENTED MR. ROBERTS ON ICE
Congress should not repeat past mistakes. Another round of bailouts would entrench tariff policy, deepen farmer dependence on Washington, and saddle taxpayers with new debt.
The path forward is not to fix a failed trade policy and end the tariffs that created the crisis. By restoring open markets, lowering costs, and reducing government borrowing, lawmakers can protect farmers and consumers. America needs stability and growth, not another costly cycle of trade blunders followed by taxpayer-funded bailouts.