The White House administration’s tit-for-tat exchange in tariffs with Beijing has severely damaged business for US farmers who rely on foreign buyers to purchase their soybeans, corn, pork and other commodities.
The package, the bulk of which will be spent on direct payments, surprised growers and traders who had expected to learn separate payment rates for soybeans, hogs, corn and other crops in the Department of Agriculture (USDA) briefing.
Many farm groups welcomed the move, but called for a trade deal with China as soon as possible. Some Democrats have slammed the plan, calling it a ‘band-aid’ and said the county-based payment system could leave some farmers with reduced aid.
Farmers have been among the hardest hit from a trade dispute with China, once a destination for more than 60 per cent of US soybean exports.
“The farmers have been attacked by China,” Mr Trump said in a press conference about the aid package. “But the $16 billion of funds will ... make clear that no country has veto on America’s economic and national security,” he said.
The trade dispute, which escalated this month after Washington and Beijing hiked tariffs on imports of each other’s goods, has left US farmers sitting on record volumes of soybeans with China halting purchases.
USDA officials said on Thursday they will roll out $14.5bn (£11.6bn) in direct payments in three separate tranches with the first one planned for late July.
“The package we are announcing today ensures that farmers will not bear the brunt of those trade practices by China or any other nations,” Secretary of Agriculture Sonny Perdue said. “While farmers would tell you they’d rather have trade not aid, without the trade ... they’re going to need some support.”
China, the world’s top soybean importer, curbed purchases of US soy last year when Trump imposed tariffs on Chinese goods, prompting China to retaliate with tariffs on US soy, pork, corn and other products.
The new aid package arrives after Mr Trump’s previous package of $11bn (£8.7bn) last year.
Reuters contributed to this report