In the midst of a government shutdown, the White House is expected to announce this week a bailout for American farmers, whose livelihoods have been impacted by inflation as well as tariffs imposed by the administration.
Agriculture is the state’s No. 1 industry, generating $111.1 billion in annual revenue. As the Carolina Journal has reported over the past six months, the tariffs have had a significant impact on North Carolina farmers, particularly those producing tobacco, sweet potatoes, and soybeans, some of the state’s largest agricultural commodities.
“I’m going to do some farm stuff this week,” said President Donald Trump at the White House on Oct. 6, according to a New York Times (NYT) report.
According to a report from Reuters, US Treasury Secretary Scott Bessent said last week that the administration would announce aid for farmers on Oct. 7.
“We have an export-dependent industry, we’ve angered its biggest customer, and, boom, now we’re bailing out the export-dependent industry,” Scott Lincicome, VP of general economics at the Cato Institute, told the NYT. “It’s kind of a slow-motion train wreck six years in the making.”
Republican lawmakers believe that American farmers could need as much as $50 billion in federal aid, according to the NYT report.
Many agriculture experts see this as a repeat of what happened in 2018, when the Trump administration imposed tariffs on China, leading to similar blowback. American farmers were given a $12 billion bailout “in response to trade damage from unjustified retaliation by foreign nations,” according to the USDA.
“I am happy to hear President Trump is considering aid for farmers who have become targets in broader global trade negotiations,” Steve Troxler, commissioner of the North Carolina Department of Agriculture and Consumer Services (NCDA&CS), told the Carolina Journal. “We all depend on farmers to feed us, and we need them to be able to continue to produce food and fiber. Farmers are hurting right now financially, and we could see many go out of business without this assistance. The last time we went through this with trade, President Trump was very good at looking after farmers, and we certainly hope that happens this time, too.”
The tariffs imposed by the Trump administration on China are primarily blamed for the impact they have had on American agriculture, especially soybean farmers, one of North Carolina’s top five cash crops.
In 2023, China was the largest importer of American agricultural products, accounting for 17% of the total, according to data from the US Department of Agriculture (USDA).
“Another round of farm bailouts might make for good politics, but it’s bad economics,” Kelly Lester, policy analyst for the John Locke Foundation, told the Carolina Journal. “These payments don’t solve the problem; they paper over the damage caused by the administration’s own tariffs. North Carolina farmers, like growers across the country, don’t want handouts; they want access to markets. The real relief would be ending the trade war and letting farmers compete freely.”
One remaining question is how the bailout will be funded. In 2018, the bailout was funded through the Commodity Credit Corporation, a federal corporation within the USDA that is currently depleted.
Trump indicated in a Truth Social post on Oct. 1 that the bailout would be funded by revenue from the tariffs.
“We’ve made so much money on Tariffs, that we are going to take a small portion of that money, and help our Farmers. I WILL NEVER LET OUR FARMERS DOWN!”
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