Update 1-U.S. Farmers Expected to get Third and Final Tranche of Trade Aid – AG Secretary

January 17th, 2020


Category: Trade

(Agriculture.com) – U.S. Agriculture Secretary Sonny Perdue said he expected the federal government to pay farmers a third and final tranche of 2019 trade aid a day after an initial deal with China was signed, Bloomberg reported on Thursday.

Washington and Beijing signed the Phase 1 pact on Wednesday, setting trade tensions between the two economic giants on pause, though some major outstanding issues remain.

Washington has paid two out of three parts of a $16 billion aid package announced in May to compensate farmers for losses sustained during the 18-month trade war, and the third had been expected in January. China imposed tariffs on imports of American agricultural goods and other products in retaliation for U.S. tariffs on Chinese goods.

The Trump administration had already spent $12 billion in trade aid for farmers in 2018. Perdue told Bloomberg in an interview that farmers should not expect a new bailout package this year, beyond the $28 billion already approved.

The U.S. Department of Agriculture did not immediately respond to request for comment on the interview.

In the Phase 1 trade agreement, China committed to buying an average $40 billion in agriculture goods this year and next, up from $24 billion in 2017 before the trade war.

The agreement did not remove China’s tariffs on key American agricultural exports like pork and soybeans, and many U.S. farmers have said they will need more assistance from the government to stay in business.

hina bought roughly 60% of U.S. soybean exports before the trade war and was a major buyer of sorghum, dairy and pork.

Chinese Vice Premier Liu He said on Wednesday that Chinese companies will buy American products “based on market conditions.” His comment increased skepticism of the deal and sent March soybean futures to a one-month low on the Chicago Board of Trade.

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