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Yesterday, President Trump said that he is backing away from some of his highest tariffs, but others remain on certain goods from Canada and Mexico, along with a staggering 145% tariff on Chinese goods. And China has retaliated. It's causing problems for U.S. farmers, so the White House is considering how to help. NPR's Danielle Kurtzleben reports.
DANIELLE KURTZLEBEN, BYLINE: Tariffs are making life more expensive for John Pihl. He's been farming in northern Illinois for more than 50 years.
JOHN PIHL: These tariffs are going to affect everything. It'll affect our parts. Yeah, it's just across the board. It's going to hurt everything.
KURTZLEBEN: Pihl sums up the double whammy of how tariffs affect farmers. First off, U.S. tariffs make the cost of supplies higher, and it raises the risk of retaliation against exports of U.S. crops.
PIHL: It's a good way to lose your customers, and I think we'll probably lose more on this round, too, because I know that Mexico is our biggest importer of corn. This time, they may figure out that they can get corn from South America just as easily as from the U.S.
KURTZLEBEN: And that's why the White House is considering direct payments to farmers. It's something the Trump administration did during Trump's first-term trade dispute with China. Back then, Agriculture Secretary Sonny Perdue used a fund called the Commodity Credit Corporation, or CCC. Here's current Ag Secretary Brooke Rollins on Fox News this week.
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BROOKE ROLLINS: We're already starting to think about what a mitigation effort might look like. Obviously, under Secretary Purdue and President Trump in Trump One (ph), they did do some mitigation with a $25 billion CCC fund. Again, hopefully, none of that is necessary.
KURTZLEBEN: It's a fund that's been around since the Great Depression, explains Joseph Glauber, a former USDA chief economist.
JOSEPH GLAUBER: This was really a new thing that the Trump administration did, is that they tapped the CCC in a way that - and certainly at a level that had not been seen before for extraordinary payments.
KURTZLEBEN: NPR asked the White House for details on what relief is under consideration this time but received no response. Government aid is helpful, but it's not farmers' first choice.
KENNETH HARTMAN: Farmers want markets. We need markets. We want to sell our grain at a profit.
KURTZLEBEN: Kenneth Hartman is president of the corn board at the National Corn Growers Association. He said that CCC payments are only a short-term fix.
HARTMAN: It's supplemental. It's needed because it keeps farmers from getting in worse financial situation, but it's not - you know, them payments are not the answer to a future successful agriculture operation in the United States.
KURTZLEBEN: Hartman says he's hopeful about Trump making deals to help farmers.
HARTMAN: Well, now, with the tariffs coming on, obviously we're hoping that the president - you know, he's a negotiator. He did a good job negotiating the USMCA when he negotiated that his first term. So we're hoping that he can do something like that.
KURTZLEBEN: There's another wrinkle to this all, which is timing. All of this tariff drama is unfolding in the spring, when farmers are making decisions about planting big export crops like corn and soybeans. China usually imports a lot of American soybeans but is also now tariffing U.S. goods at 84%. That means, first of all, a lot of American soybean farmers might decide to grow other crops, like corn, which would drive those prices down. But also, an aid package announced too soon might distort markets, says Glauber, the former USDA economist.
GLAUBER: Because if you're too generous with one crop vis-a-vis another, you could have farmers making planning decisions based on what they think those compensation payments might be.
KURTZLEBEN: Farmers have worries beyond the next year, though. In Illinois, Pihl says that the payments in Trump's first term were helpful, but he adds...
PIHL: That was just for the one year. What about the market loss that continued through his term and into Biden's term? I think the amount is incredible.
KURTZLEBEN: Soybean exports to China plummeted during Trump's first trade fight with China, and they haven't recovered. China instead chose to buy more from Brazil, and that's still the case now. Pihl fears that this trade war will make that worse, so aid payments just might be necessary.
PIHL: I don't want it, but I'll take it. I'd be an idiot not to take it. That's about all I can say.
KURTZLEBEN: Both the U.S. and Chinese tariffs are much higher than they were six years ago. Depending on how long they persist, there's no way of knowing just how much they'll hurt farmers. Danielle Kurtzleben, NPR News.
(SOUNDBITE OF CROOKED STILL SONG, "ECSTASY") Transcript provided by NPR, Copyright NPR.
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