Rep. John Duarte, R-Calif., unveiled a plan to save American farmers from potential financial ruin from years of Chinese tariffs in an exclusive interview with the Daily Caller News Foundation on Wednesday.

When the trade war with the Trump administration escalated in 2018, China imposed retaliatory tariffs on many U.S. agricultural products, resulting in plummet Exports to the country and excess U.S. inventories are weighing on domestic commodity prices. Now, Duarte — fourth generation One of the leading farmers in this country productive Agricultural regions are trying to save U.S. producers from the brink of bankruptcy through a roughly $6 billion subsidy program as the ripple effects of China's economic blockade continue. (Related: Failed Democratic Congressional Candidates Begin Rerunning for House Seats)

“[Following the retaliatory tariffs] Farmers began building up large inventories of products that would not be shipped overseas,” Duarte explained to DCNF. “Initially, this was addressed with the Trump Administration's Initial Market Facilitation Program, which allocated approximately $23 billion to farmers to offset some of the impact of retaliatory measures. [agricultural] Tariffs in the general trade war that occurred. ”

China imposed tariffs on approximately $22.5 billion worth of agricultural products in July 2018. retaliation The move is in response to tariffs imposed on steel and aluminum by former President Donald Trump to force China to crack down on intellectual property theft. President Trump then launched the Market Facilitation Program. distributed Injected $23 billion in 2018 and 2019 to compensate farmers for their losses.

“To some extent, [the market facilitation program] “While it was great in the short term, it kept the industry from responding to market conditions for another year or two and capacity remained intact,” Duarte continued. “As the pain from the initial trade impact was not felt, farmers kept producing and inventories went up and up.Now, with inventories higher and commodity prices down, farmers are facing higher interest rates. Agricultural debt is at an all-time high, with people forced to borrow money to support their assets and businesses.

Samantha Ayoub, an economist with the American Farm Bureau Federation, said net farm income this year is expected to be down nearly 40% from 2022 levels, and farm operating debt in the first quarter of 2024 is expected to decline from a year earlier. It is said that there will be a sudden increase of 15%. said Michigan Farm News for August. The decline in global supply chains is reducing farmers' economic well-being. adjusted The decline in Ukraine's exports has led to a decline in the prices of many agricultural products. niceAverage nominal prices for corn and soybeans in February were the second and fourth lowest since 2006, respectively, after adjusting for inflation.

Duarte has seen many personal friends pushed to the brink of bankruptcy amid current stressors such as low interest rates. Product pricean increase in interest rates; swollen Fertilizer costs, including farmers and former California state legislators bill berryhill.

“Bill Berryhill is The best farmer. He's innovative. He embraced technology. He has mentored generations of other farmers, teaching them to be more efficient, learn about the market, and make effective decisions. And even he and his family are in their final years,” Duarte told DCNF. “I've been talking to bankers and top-of-the-line farmers across the community. People who don't buy vacation homes or fancy planes. Farmers who invest in their operations, innovate, and take the time to talk and learn from each other. The current climate of inflation and commodity prices makes it structurally impossible for us to sustain ourselves, and we are hearing that across the board from banks.”

However, Duarte told DCNF that he believes economic disaster can be avoided for U.S. farmers and hopes that farmers will continue to export goods to China at competitive prices. Commodity Credit Co., Ltd. (CCC) — a government-owned corporation that provides loans to support the U.S. agricultural sector — will shoulder up to a quarter of the tariff costs to make it financially viable. He argues that the measure will allow farmers to dispose of excess stock, thereby increasing commodity prices.

“What I believe is that [Biden-Harris] What the government should do is inject about $6 billion to $7 billion from the CCC in retaliation for market facilitation. [agriculture] It would supplement the tariffs and essentially backfill up to 25% of the retaliatory tariffs that farmers face from China. ”

The congressman also hopes the subsidy program will help countries like Brazil and Australia strengthen their agricultural industries in the coming years and prevent them from stealing market share from the United States.

“China is trying to replace U.S. agricultural products for which there are better alternatives,” Duarte told DCNF. “We see other countries, namely Australia and Brazil, expanding their agricultural industries to fill the void. [left by the decline in U.S. exports]. These capital investments will be fairly static, so in the future we will have to compete with these countries, so even if there is a price or retaliation. [agricultural] Even if tariffs are eased, they will still face competition from well-capitalized and established players who may not have been penalized by tariffs over the past seven to eight years. ”

Brazil's soybean subsidy exports to China increased by nearly $4 billion in 2018 when the tariffs were imposed. According to Based on USDA January 2022 report. Meanwhile, U.S. cotton exports to China fell by $400 million, with competing exporters such as Brazil and Australia making up the difference, the study found.

“There is a lot of criticism of China's accession to the World Trade Organization (WTO). We had emotions,” Duarte told DCNF. “Things didn't go that way, so we fought China in court for five years and won. They were then instructed to cease retaliatory measures. [agriculture] It is suing the tariffs in the World Trade Organization courts, but has not yet done so. ”

WTO dominated August 16, 2023, China's retaliatory measures customs duty Although these were “inconsistent” with international trade rules, the country refused to reverse the policies. Ann analysis According to a study by the Economic Policy Institute, from 2001, when China joined the WTO, to 2018, 3.7 million American jobs were lost due to the U.S. trade deficit.

“China should never have joined the WTO in the first place. Since then, China has manipulated global trade, currencies, and access to markets in every way possible,” Duarte told DCNF. “Now American policymakers need to take the gloves off.”

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