Rampell: Trump promised U.S. farmers ‘smarter’ trade deals

The first tranche of Trump’s $12 billion agricultural bailout program began Tuesday, when farmers and ranchers — a key voting bloc in congressional districts across the country, it’s worth noting — can start applying for subsidies to offset trade-related losses.

The bailout package, which does not require additional authorization from Congress, relies in part on a 1933 law created to help farmers hit by the Great Depression; the Agriculture Department says this is the first time it has been used to compensate for losses from trade. The program is three-pronged, involving direct payments; purchases of surplus food; and some money to subsidize the marketing of exports.

Needless to say, none of this jibes with the president’s claims that he favors free markets, hates handouts, despises political favoritism and is tightening the federal budget. It’s not even consistent with his stated desire to get out from under China’s thumb.

That bailout spending, after all, looks like it will be paid for at least partly through more federal borrowing — including, presumably, from China, which is the largest foreign holder of U.S. Treasurys. Because, hey, why sell soybeans to China when instead we can borrow from China to pay farmers not to sell soybeans to China?

Other industries suffer, too

Soybean farmers could certainly use the money. Supply and demand for their products could be way out of whack this year.

“I have never seen a soybean crop this good,” Peter J. Meyer, senior director of agricultural commodities analytics at S&P Global Platts, told me last week, shortly after he returned from a crop tour. For the first time in many years, farmers planted more soybeans than corn, he said, and yields have been exceptionally strong.

Simultaneously, orders from China — by far the top foreign purchaser of U.S. soybeans — have plunged.

“The line I kept hearing is, ‘We don’t want a welfare check. We want open markets,'” Meyer said.

Especially since the welfare check could be a one-time disbursement, whereas markets could be closed off indefinitely.

Meanwhile, other industries finding themselves as collateral damage in Trump’s trade war are left to wonder where their government cheese is.

U.S. seafood suppliers, factories that purchase steel, and chemical companies are suffering, too. Threats of additional tariffs and lingering uncertainty over trade policy are also causing firms to re-evaluate or delay investment.

Thus far, the administration has not been able to unearth a Depression-era law to help buy off the votes of the workers in those industries. But as the trade war rages on, you can bet Trump will keep looking.