US government pays out to protect farmers hit by trade war

The U.S. Department of Agriculture has announced details of a $12 billion (£9.3bn) support package for farmers affected by its trade war with China.

In a statement released August 27, Secretary of Agriculture Sonny Perdue said President Trump had instructed him to ensure farmers did not “bear the brunt of unfair retaliatory tariffs,” and added that the tariffs would benefit agriculture “in the long run.”

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The Office of the U.S. Trade Representative announced a new tranche of tariffs on Chinese goods on August 23, amounting to an additional $16 billion on top of around $34 billion of tariffs on Chinese goods in July.

The Chinese government responded almost immediately with about $16 billion worth of tariffs on U.S. imports.

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The majority of the funding has been assigned to the Market Facilitation Program, within which soybean farmers will receive an initial $3.6 billion. The funding for this program could be increased if necessary, said Perdue.

The full breakdown of the support package can be found here.

The U.S. Department of Agriculture estimated in July that Chinese tariffs would cost farmers around $11 billion.

  • Are there other estimates available? What about the impact of the new tariffs announced August 23?

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The Chinese Ministry of Commerce has accused the U.S. of violating World Trade Organization rules. Other world leaders have criticized the tariffs and warned about the potential impact on economic growth.

  • Has the U.S. breached WTO rules and what could be the implications?

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Read more: Asking the experts on Trump’s “dismantling” American trade policies.


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