Farmers will need government relief this year after the trade war choked off access to key markets, Senate Majority Leader John Thune (R-S.D.) said Sunday.
Why it matters: Thune's comment, following a promise from President Trump earlier in the week, sets up a potential battle over what would likely be a multibillion-dollar package — and a separate fight over why it was needed in the first place.
Catch up quick: China has stopped buying U.S. soybeans, depriving American farmers of their largest export market.
- That happened months ago, but the issue came back to the fore this week when the U.S. government pledged to bail out Argentina — and the Argentines promptly turned around and started selling discounted soybeans to China.
- Congressional Republicans like Sen. Chuck Grassley (R-Iowa) blasted the idea of helping Argentine farmers while doing nothing for domestic sales.
What they're saying: "There are markets right now that aren't open to some of our commodities," Thune said on NBC's "Meet the Press" Sunday. "As a consequence of that, there are — we've got a big harvest coming in here in South Dakota, corn and soybeans, and no place to go with it."
- Thune said the Senate Agriculture Committee, of which he's a member, was already looking at potential solutions to support farmers.
- "At the end of the day, our farmers are probably going to need some financial assistance this year, and a lot of the revenue coming in off the tariffs is what they would use to provide that."
Flashback: The trade war in Trump's first term also ended up requiring a farm bailout, one big enough to absorb almost all the tariff revenue collected.
Yes, but: There's a lot more revenue this time — more than $30 billion a month, making the cost of a relief program more manageable, assuming an agreement can be made.
- That may be a tall assumption, given rumblings from Democrats already regarding the hurdles a tariff-funded bailout would have to face, like CBO scoring and mandatory offsets.
What to watch: For all of the assurances by Trump and Thune, no program is on the table yet, and it's not clear when one might be coming.
