Trump promises farmers aid from tariffs, but questions remain
By Jerry Hagstrom, The Hagstrom Report
| President Trump said Thursday that the administration will use federal income from tariffs to aid farmers hurt by the loss of foreign markets, but did not offer details of how such transfers would be made and many questions remain about this promise. In an Oval Office meeting, Trump said that the administration would take some of the increased federal income from tariffs to help farmers but that the tariffs would eventually help them. “We’re going to take some of that tariff money that we made, we’re going to give it to our farmers who are [for a little while] going to be hurt,” Trump said while taking questions. “So we’re going to make sure that our farmers are in great shape, because we’re taking in a lot of money.” It’s unclear exactly how Trump could fulfill that promise. Tariff receipts are deposited in the U.S. Treasury general fund. Treasury Secretary Scott Bessent does not have authority to direct those receipts toward agriculture except for an account known as Section 32, which refers to a provision in the 1935 Agricultural Adjustment Act that allocates some tariff revenue to be used to support commodities that are not supported by the Commodity Credit Corporation or other farm programs. Section 32 has been used to support fruits, vegetables, meats, poultry and fish. It is also used to fund the Fresh Fruit and Vegetable Program and other child nutrition programs. A House Agriculture Committee Democratic aide noted that Section 32 is funded based on the percentage of custom receipts from the prior calendar year, which would mean that the money would not be available until fiscal year 2027. Farmers and members of Congress have said the farmers need emergency aid this fall because commodity prices are low, input costs are high and China isn’t buying U.S. agricultural products, particularly soybeans and cotton. Most likely any change to the rules regarding the use of tariff revenues in the general fund would require an act of Congress, which means any proposal would be subject to congressional debate and budget rules including required offsets. Cornell Law School has published guides to how both Section 32 and the Commodity Credit Corporation, USDA’s line of credit at the Treasury, can be used to help farmers. The first Trump administration used the CCC to provide about $23 billion in aid to farmers hurt by the loss of export sales. The CCC can spend only $30 billion per year and payments under the Agricultural Risk Coverage and Price Loss Coverage and conservation programs are expected to rise once the One Big Beautiful Bill Act goes into effect next year, absorbing a large portion of that allocation. House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., said in response to Trump’s statement, “Years of Biden’s broken promises, from failing to enforce the Phase 1 agreement to letting inflation run wild while foreign governments use our farmers as pawns, have devastated American agriculture. President Trump is right to support them and step in to provide a bridge to the enhanced farm safety net policies in H.R. 1, which will kick in next year. I’m committed to working with the Trump Administration to support farmers and rural America during critical economic times.” In a speech and news conference in Kansas City, Agriculture Secretary Brooke Rollins said she “does not have a silver bullet” to help farmers, but aid is coming, DTN/Progressive Farmer reported. Rollins offered an explanation for Trump’s long term strategy. “But we also know that as the president is looking at the long-term fix, the complete realignment of the world economy around American agriculture and American goods, that there are bills that are due this month as we move into harvest. There are loans that have to be secured in the next eight to 12 weeks to plant for next year, that there are mouths to feed, and we have to make some difficult decisions right now. I do not have a silver bullet.” Meanwhile, Argentina’s sale of soybeans to China while also receiving aid from the U.S. government to deal with its financial problems has made national news in Fortune and The New York Times. |
