It was just a decade ago that America’s financial system was in a meltdown and the economy headed into a free-fall.
The Troubled Asset Relief Program (TARP) was a set of programs created and run by the U.S. Treasury to stabilize the country’s financial system, restore economic growth, and mitigate foreclosures in the wake of the 2008 financial crisis. TARP was included in the Emergency Economic Stabilization Act of 2008, which included the bailouts for large financial institutions, banks, and eventually Chrysler and GM automakers.
Even as the financial system was in a meltdown and the economy in a free-fall, a majority of Republicans in Congress voted against the TARP bailouts. 73 percent of House Democrats voted in favor of the bailouts, compared to 46 percent of Republicans. Despite prodding from Republican President Bush and Treasury Secretary Paulson, and House Minority Leader John Boehner’s emotional plea to put country first and vote yes, a majority—54 percent—of House Republicans still voted against the bailouts.
“Let it burn!”
In the Senate, strong majorities of both Democrats (80 percent) and Republicans (69 percent) voted for bailout passage, but with significantly greater Democratic support.
This was the actual birth of the so-called Tea Party movement. The grassroots conservatives who opposed the bailouts later comprised the early Tea Party movement.
Fast forward to today. The Tea Party got the president they wanted in 2016, an abrasive egomaniacal man-child demagogue who promised them a trade war with China.
The trade war that these yahoos voted for is now beginning to adversely impact Republican Party constituencies in red states, i.e., farmers (agribusinesses). Farmers’ Anger at Trump Tariffs Puts Republican Candidates in a Bind:
As President Trump moves to fulfill one of the central promises of his campaign — to get tough on an ascendant China — he faces a potential rebellion from a core constituency: farmers and other agricultural producers who could suffer devastating losses in a trade war.
Mr. Trump’s threat to impose tariffs on Chinese goods came with a presidential declaration that trade wars are good and easily won. But the action has injected damaging uncertainty into the economy as Republicans are already struggling to maintain their hold on the House and the Senate in a difficult election year.
While the battle for control of the House will be waged in large part in the suburbs, rural districts in Southern Illinois, Iowa, Arkansas and Missouri could prove important. And control of the Senate could come down to Republican efforts to unseat Democrats in North Dakota, Indiana, Missouri and Montana — all states staring down the barrels of a trade war’s guns.
With farmers angry and worried as China vows to retaliate, many Republicans find themselves torn between loyalty to a president who remains broadly popular in rural states and the demands of constituents, especially farmers, to oppose his tariffs.
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China’s aggressive response to Mr. Trump’s tariffs is aimed squarely at products produced in the American heartland, a region that helped send him to the White House. A trade war with China could be particularly devastating to rural economies, especially for pig farmers and soybean and corn growers. Nearly two-thirds of United States soybean exports go to China.
President Trump declared tariffs “the greatest” on Twitter Tuesday morning, even as his administration prepares to bail out the agricultural industry, which is weathering financial turmoil induced by his trade policies. Trump: “Tariffs are the greatest.” Also farmers need $12 billion in aid because of tariffs.
The administration reportedly plans to give farmers $12 billion in emergency aid to cope with the fallout from the tariff regime, Politico first reported Tuesday. Farmers have been among those hit hardest under Trump’s protectionist trade agenda, as foreign countries levy tens of billions of dollars in retaliatory tariffs largely on the American agricultural industry. China, Mexico, and Canada have responded to the Trump administration’s taxes on imported steel, aluminum, and electronics with taxes on American soybeans, dairy, pork, apples, and potatoes, as well as other US products.
The impact of tariffs on US agriculture is no joke. Prices for agricultural products like soybeans have dropped to a 10-year low since Trump imposed sweeping tariffs on trade and aluminum earlier this year. And farmers across different markets have grown increasingly nervous about how their businesses will fare if the trade war continues.
The administration’s plan, which has yet to be formally released, would reportedly be aimed at stabilizing the agricultural industry through three programs:
- Direct financial assistance for farmers.
- A purchase and distribution program, where the government buys up surplus agricultural products and redistributes them for low-income food assistance.
- A trade promotion program.
The Washington Post reported that this stabilization package will use a Depression-era program that allows the government to borrow up to $30 billion from the Treasury without congressional approval.
Some kind of fix for farmers has been in the works for quite some time. Rep. Mike Conaway (R-TX), who chairs the House Agricultural Committee, told Vox last week that he was confident the administration would act to help farmers “persevere” through this period.
Meanwhile, Trump appears steadfast in his tariff agenda. He has already threatened to tax foreign car imports ahead of trade talks with the European Union this week, and has been tweeting a very rosy picture of the tariffs’ impact on the American economy.
“I am fighting for a level playing field for our farmers, and will win!” he tweeted earlier this month.
Trump has been clear and consistent about his restrictionist trade agenda. The administration ended exemptions to steel and aluminum tariffs for many US trade allies, including Canada, Mexico, and the EU, in May. Trump has imposed tariffs on an additional $34 billion worth of Chinese products. He’s threatening tariffs on a total of $500 billion of Chinese goods and a foreign car and auto parts import tax that would hit American trade alliances in Europe.
People in the American agriculture industry know that if the administration continues to follow through on this, they’ll be the ones continuing to get hit.
Agriculture has incredibly low barriers to trade, making the industry an easy target for retaliatory tariffs. Already, Mexico, China, and Canada have retaliated to the United States’ newly placed steel and aluminum tariffs with tariffs of their own.
“It’s one of the few areas that the US has a surplus; it makes sense they would target that,” Chad Hart, a crops market specialist with Iowa State University, told Vox, adding that there’s a political strategy element as well. “It makes sense politically because you are looking at Republican leadership, and farmers do tend to vote more Republican.”
The US has about $140 billion of agricultural exports a year. Canada and Mexico are major trade partners, together importing about $39 billion. China, Japan, and South Korea import around $39 billion, and Europe makes up around a $12 billion share of agricultural imports. But tensions are high across the board.
While many farmers are Republicans and Trump supporters — and generally can get behind Trump’s call to equalize the playing field — one Wisconsin dairy farmer, Roger Mehre, told Vox earlier in July that farmers in his circles are getting increasingly nervous.
“I almost get the feeling that [Trump] is trying to be a bully and he is making these countries bow to him, and that’s just not going to happen,” Mehre said, pointing out that it’s not just dairy that’s affected; it’s pork, soybeans, corn, poultry — the list goes on. “We need them, and they need us. Both sides are going to lose.”
Perdue has tried to assure farmers they’ll be protected from any trade wars, and this emergency aid package is certainly a step to mitigate financial disaster. But farmers don’t have a clear idea what the president’s endgame is, and Trump hasn’t treaded lightly with his rhetoric. It’s something Republican lawmakers from agriculture-heavy states, like Sens. Ben Sasse (R-NE) and Chuck Grassley (R-IA), have warned the administration about.
“This is dumb,” Sasse said in a statement in May. “Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents. We’ve been down this road before — blanket protectionism is a big part of why America had a Great Depression.”
Trump does seem aware of the potential political fallout. But for now, he’s trying to convince farmers to stick with him — and his administration is attempting to stanch the bleeding with billions in
emergency aid bailouts.
So it has come to this: taxpayer-funded bribery — dreaded bailouts! — to farmers to vote for the GOP this fall (it’s illegal to pay people for their votes) after being economically harmed by Trump Tariffs from the damned fool that they elected in 2016.
If farmers leave the GOP in power, things are only going to get far worse for them, and us all, as this trade war spirals out of control. It’s time for farmers to plow the GOP under and use them for fertilizer to end this trade war.
UPDATE: Farm groups are going on the offensive with a multimillion-dollar advertising and advocacy campaign against President Donald Trump’s tariffs just days after the administration rolled out a $12 billion bailout for farmers harmed by a mounting trade war. Farm groups go on anti-tariff blitz after Trump offers trade aid.
“Agriculture is a giant, and it takes awhile to wake it up, but when it wakes up you better watch out,” said Brian Kuehl, executive director of Farmers for Free Trade, which is organizing the campaign.
The nonprofit group, which is backed by the American Farm Bureau Federation and major commodity groups like the National Pork Producers Council, is investing $2.5 million in the four-month campaign aimed at showcasing how the tariffs are causing pain among U.S. farmers and manufacturers because of Trump’s trade policies.
The centerpiece of the campaign is an advertisement set to run on Fox News, CNBC and CNN and in local television and radio markets in Iowa, Pennsylvania and Michigan. The ad calls out a July 19 remark by White House trade adviser Peter Navarro in which he called the impact of tariffs a “rounding error.”
“America’s farmers and factory workers are not a rounding error,” the ad says.