President Donald Trump said that the U.S. will boost its purchases of domestic farm products for humanitarian aid in an effort to offset lost demand from China as trade tensions flare between the nations.
Trump said on Twitter on May 10 that the U.S. will use its money from the tariffs to buy American agricultural products “in larger amounts than China ever did” and send it to “poor & starving countries” for humanitarian aid. The president indicated potential purchases of $15 billion from farmers. Soybean and grain futures held mostly steady after the announcements.
“In the meantime we will continue to negotiate with China in the hopes that they do not again try to redo deal!” Trump said on Twitter. “Our farmers will do better, faster and starving nations can now be helped.”
Soybean and grain futures plunged this week as U.S. trade talks faltered with China, the world’s top oilseed buyer, and the Asian nation vowed retaliation as the U.S. boosted tariffs on $200 billion in goods. On the Chicago Board of Trade, soybean, corn and wheat futures for July delivery were little changed at 8 a.m. local time.
In the 2017 fiscal year, the U.S. gave 3.12 million tons of foreign food aid valued at $3.62 million, according to a report from the U.S. Agency for International Development. Trump’s tweets didn’t provide details on which government agency might be involved in purchases from farmers or aid.
“To buy humanitarian aid is not that simple,” Louise Gartner, owner of Spectrum Commodities in New Richmond, Ohio, said in a telephone interview. “I’m sure the market has seen those tweets, and they’re not thinking much of it.”
U.S. Agriculture Secretary Sonny Perdue said in April that he wasn’t aware of any additional aid under discussion for farmers. In 2018, the U.S. administration said it would deliver as much as $12 billion to farmers after Beijing slapped retaliatory tariffs on U.S. agricultural products.
Last month, the World Trade Organization ruled that China didn’t follow proper procedures when it imposed trade restrictions on agricultural imports.