The Cost of Trade-Related Aid to American Farmers



National Foundation For American Policy

The Trump administration provided more taxpayer dollars to farmers financially damaged by the administration’s trade policies than the federal government spends each year building ships for the Navy or maintaining America’s nuclear arsenal. A National Foundation for American Policy analysis found the spending on farmers was also higher than the budgets of several government agencies. The amount of money raises questions about the strategy of imposing tariffs and permitting the use of taxpayer money to shield policymakers from the consequences of their actions.

In 2018, the Trump administration initiated a series of tariff increases against imports from China. The government of China responded with its own tariff increases, which caused U.S. exports to China, most notably agricultural products, to drop significantly. The U.S. International Trade Commission reported that soybean exports from U.S. farmers to China declined by 75% in 2018.

The Trump administration responded not by changing its trade policies but by shoring up the president’s political support from farmers. To accomplish this, Donald Trump approved large amounts of government aid to farmers through the Commodity Credit Corporation and the U.S. Department of Agriculture. Statements by Trump have made it clear the purpose of the payments was political, saying, “Well, they can’t be too upset, because I gave them $12 billion and I gave them $16 billion this year. . . . I hope you like me even better than you did in ’16.”

The administration listed the large amount of taxpayer money provided to farmers in a December 31, 2019, White House fact sheet on the president’s accomplishments during first three years in office: “The Trump administration has authorized a total of $28 billion in aid for farmers who have been subjected to unfair trade practices.”

The Commodity Credit Corporation (CCC) turned out to be an ideal vehicle for providing money to politically important constituents, since the legal justifications for the Department of Agriculture to spend funds authorized for the Commodity Credit Corporation are not stringent. However, questions about the legality of the payments were raised within the administration.

The $28 billion in expended funds caused the CCC to come “close to its borrowing authority limit of $30 billion,” according to the Congressional Research Service.

The $28 billion authorized by the Trump administration to pay farmers after other countries retaliated against administration-imposed tariffs represented a large amount of taxpayer money even by federal government standards


Read the full research report here