Importers paying for extra farm aid
President Donald Trump has calculated that it will take $16 billion more to keep farmers from protesting his trade war with China.
That will bring to $27 billion in two years that the president has used to try to buy farmers’ silence, or at least to keep their dissent to a low rumble over losing, at least for now, a huge market for their soybeans and some other commodities.
Even if the payoffs work politically, it still leaves the question of who is paying for that extra farm aid.
The Trump administration claims it’s the Chinese, whose exports to the U.S. are being hit with higher tariffs. But, as most economists point out, those tariffs are not really borne by the Chinese. They are passed on first to the American businesses that use Chinese factories as suppliers, and then those U.S. businesses either raise their prices or take lower profits.
Thus, what’s really happening is that a broad swath of U.S. importers or their customers are subsidizing one category of U.S. exporters on whom Trump is counting to win re-election next year.
This being farm country, we’re thankful that farmers are going to get the aid to make up for a misguided trade policy. But we also understand why other parts of the country, which are picking up the tab, might not feel so charitable about it.
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