China will “not be able to hurt” American farmers, according to a tweet from President Donald Trump Tuesday morning. Trump indicated he is ready to extend tariff aid for farmers into 2020.
As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do - And I’ll do it again next year if necessary!— Donald J. Trump (@realDonaldTrump) August 6, 2019
The tweet comes days after the President extended the trade war with China by announcing that 10% tariffs on $300 billion worth of additional goods will go into effect Sept. 1. China retaliated by halting purchases of U.S. agricultural products and by softening the value of the Chinese currency against the dollar. That escalation of the trade war was met with disappointment from the American Farm Bureau Federation (AFBF).
“China’s announcement that it will not buy any agricultural products from the United States is a body blow to thousands of farmers and ranchers who are already struggling to get by,” said AFBF President Zippy Duvall in a statement to media. “In the last 18 months alone, farm and ranch families have dealt with plunging commodity prices, awful weather and tariffs higher than we have seen in decades.
“Farm Bureau economists tell us exports to China were down by $1.3 billion during the first half of the year. Now, we stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion U.S. farmers exported to China in 2017.”
USDA has indicated there is the potential for three tranches of Market Facilitation Program (MFP) payments in 2019, following two rounds of payments in 2018. The first 2019 round, totaling more than $9 billion, is set to be released in September. The escalation of tariffs and the president’s tweet are key indicators that the second and third tranches of the 2019 MFP will be released.
If all $16 billion of the money allotted to 2019 MFP is released, that will bring to $28 billion in tariff aid over two years. That $28 billion equals the approximate market capitalization of ADM and Bunge combined, according to Bloomberg.