Tuesday, December 18, 2018

Trump OKs second round of aid to farmers hurt by trade war, after renewed Chinese soybean buys aren't enough

President Trump said Monday that the U.S. Department of Agriculture will proceed with a second round of payments to farmers hurt by the trade war with China. The aid package could amount to as much as $12 billion, split into two rounds; the first has already been distributed.

"USDA expects direct payments to farmers under the program to total $9.567 billion, with around $7.3 billion for soybean farmers, the hardest hit from the trade war," Doina Chiacu and Humeyra Pamuk report for Reuters. "The USDA program includes an additional $1.2 billion in food purchases, and around $200 million to develop foreign markets, bringing the total estimated aid to just below $11 billion."

There was some doubt about whether the second round of aid would happen. President Trump and China's President Xi Jinping agreed recently to a brief ceasefire in the trade war, and China began buying a small amount of U.S. soybeans again. Though the Chinese only bought 1.13 million tons, a tiny fraction of what they usually buy, the Trump administration delayed the second round of farmer aid in hopes that Chinese purchases would make it unnecessary. That has not been the case, Chiacu and Pamuk report. Soybean sales to China are unlikely to pick back up soon; Brazil's soybean crop is ready for harvest, and China generally buys there in the early months of the year.

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