Trump's farm aid amounts to a $12 billion mute button for tariff gripes

The Register's editorial | The Des Moines Register

Show Caption Hide Caption Why China's tariffs matter to Iowa Iowa is an agricultural powerhouse, exporting products all over the world. That’s why many are concerned about a possible trade war with China.

See if this makes sense to you: President Trump starts a trade war with China. When American farmers complain, he decides to pay them off with $12 billion. Meanwhile, he continues to borrow money from China to keep the government running.

It’s just one of the absurdities sprinkled like soy nuts on top of the half-baked corn muffin of Trump’s scheme to reverse trade deficits while driving up the federal deficit and debt.

Here’s what we’re talking about:

Trump thinks China is ripping off the United States by using protectionist trade practices that put American businesses at a disadvantage. So he unilaterally imposes tariffs on steel and aluminum and other foreign goods, launching a trade war of retaliatory tariffs, including on soybeans, pork and other agricultural goods produced in Iowa.

Farmers, who stand to lose billions of dollars in exports, complain, so Trump proposes up to $12 billion in direct payments and other aid for agriculture. This isn’t tax money — it comes from fees paid on imports from places like, well, China. But it’s money going out while the federal budget is projected to run up a trillion-dollar deficit by 2020.

China remains the United States’ largest foreign lender, with about $1.2 trillion of our debt as of October 2017, according to Bloomberg News.

Japan and Brazil are next in line. Brazil, by the way, is a major competitor in the soybean export business, and it stands to gobble up market share from Iowa and other major exporters.

It isn’t any wonder that some prominent conservatives, including the Koch brothers, and budget hawks like Sen. Rand Paul are lambasting the move as “welfare” for farmers.

"Tariffs are taxes that punish American consumers and producers," Paul wrote on Twitter. "If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs."

Most of Iowa’s Republican congressional delegation seems to agree that the farm aid package is a Band-Aid that wouldn’t be necessary if Trump would just agree to refrain from the unnecessary limb amputation. But they are still willing to take the Band-Aid.

Sen. Joni Ernst put it this way: “In Iowa alone, more than 456,000 jobs are supported by global trade, and these new tariffs are threatening $977 million in state exports. While a trade mitigation package could boost farmer morale in the short term, this is ultimately a short-term fix. We need a longer-term strategy to ensure that farmers are able to sell their goods around the globe.”

Rep. David Young was more skeptical of the aid package, however. "What this really is, though, is the administration — the president — admitting that his trade policies are hurting Iowa farmers and producers, and all across the heartland for that matter," Young said in an interview with WHO-TV. "Farmers want markets, they want trade, and not necessarily this aid."

More: Trump's $12 billion bailout for farmers draws mixed reactions in Iowa

The timing of Trump’s aid package is highly suspicious. As the Register, the Washington Post and other media have reported, most soybean farmers are doing fine right now because most of their crop was sold in advance at higher prices than today’s market rate. That may not be the case with all other producers and manufacturers, but the real concern seems to be about what might happen if this trade war drags into next year.

The apparent goal of Trump’s farm giveaway and the way it is most likely to be effective is as a $12 billion mute button for the legitimate concerns of farmers, agribusinesses and officials in rural, GOP-friendly states. And right before the midterm elections, too. Does this plan make sense now?