Subsidies not long-term fix
A White House plan for $12 billion in subsidies to aid farmers through the initial impact of a trade war with China seems fair, but only for a time.
Over the long haul, the best solution for farmers who grow pork and soybeans in America’s heartland is to let them sell the work of their hands on the world market, including to China.
China knew exactly what it was doing when it targeted products it buys heavily from the U.S. in retaliation to President Trump’s tariffs on Chinese imported metals. It took aim at Trump’s supporters in the states that supported him heavily.
Overall, according to the USDA, China imported $19.6 billion in U.S. farm goods in 2017, making it the second-largest export market for U.S. farmers, behind Canada, at $20.5 billion, which also is involved in a tariff spat with the U.S.
The $12 billion won’t save every farmer from economic harm, but it could at least help some over the rough financial spot that is to come if calmer voices aren’t soon heard on trade.
The world operates in an interconnected fashion, and slapping tariffs around in the end only hurts workers in the fields, in the factories and ultimately, in the stores that sell goods, from the auto dealer to the already hurting department store fighting against Internet sales.
The political impact for now is minimal, but many economists predict harm to come after the initial spurt of purchasing provided a boost ahead of the enactment of the tariffs. In other words, it could be a rough autumn with a rough economic fall.
China already has begun to make deals with other suppliers for agricultural products.
The $12 billion farm subsidy is a humanitarian move, but not a solid, long-term business plan.