Don't Bail Out Farmers Again
Farmers will bear the brunt of Trump's trade war. That's a good reason to avoid tariffs in the first place, not an excuse for another bailout.
In public, President Donald Trump promises that high tariffs will make Americans wealthier than ever.
"We're going to become so rich we're not going to know where to spend that money," he said earlier this month while discussing his tariff plans with reporters.
Behind the scenes, however, the White House is reportedly confronting a very different reality: one in which Trump's trade war leaves many Americans worse off, with farmers likely to be hit the hardest.
And the White House seems to have a pretty good idea about where some taxpayer money is going to have to be spent.
Agriculture Secretary Brooke Rollins told reporters last week that the White House has asked her to "have some programs in place that would potentially mitigate any economic catastrophes that could happen to some of our farmers" as a result of a trade war.
As The New York Times notes, it is unclear right now whether that means direct payments to farmers or some more roundabout effort. "We're working that out right now," is what Rollins said when asked.
The time to work that out might be running short. Trump has promised to ramp up his trade war with Mexico and Canada in early April, and the administration also plans to start slapping so-called "reciprocal tariffs" on imports from other countries on April 2. As the various trade wars escalate, farmers are likely to be on the front lines—because American agricultural exports are an easy target for retaliatory tariffs from other countries. If that happens, American farm goods could be cut out of global markets and would likely incur heavy losses.
That's exactly what happened during Trump's first term, when his trade war with China caused American farmers to lose a sizable chunk of one of their largest export markets. When farmers complained about it, the Trump administration provided a $28 billion bailout via a New Deal–era program at the Department of Agriculture.
Some of that is already happening. In response to tariffs imposed by Trump in February, China slapped new tariffs on a wide range of American farm exports, including beef, chicken, corn, cotton, dairy, fruits, pork, soybeans, and various vegetables. Both Canada and Mexico have indicated that they plan to retaliate against American tariffs with new levies targeting American agricultural goods.
It's impossible to know how bad the losses for American farmers could be, but the potential is high. The U.S. exported $176 billion of agricultural goods in 2024, and the three largest destinations for those exports were Mexico, Canada, and China, according to the Farm Bureau.
That gravy train of federal subsidies to farmers is already rolling again, even before the majority of Trump's promised tariffs hit. The Department of Agriculture announced earlier this month that it will distribute $10 billion in "emergency" income subsidies funded by the spending bill Congress approved in December.
That's likely to be "a drop in the bucket" of what taxpayers will eventually spend if a major trade war begins, warns Taxpayers for Common Sense. "If a new regime of tariffs and retaliatory tariffs goes into effect, the question isn't whether economic pain can be expected, but how much pain, for how long, and to what end?"
That's the nasty thing about trade wars. Not only do they harm manufacturers and consumers seeking to buy raw materials and finished goods from abroad, but they also harm domestic producers (like farmers) who lose access to foreign markets and therefore earn less money. Tariffs hurt Americans who want to eat avocados from Mexico, and Americans growing soybeans to sell there. There are a lot more losers than winners—and that's before taxpayers get put on the hook for bailouts.
There should be no taxpayer-funded bailouts for American farmers who get burned by Trump's trade wars. If the White House is concerned about the consequences that higher tariffs will have on American agriculture, there is an easy solution: Don't impose them.
