The president has been hitting trade adversaries hard with tariffs in order to balance our trade deficits, but the tit-for-tat with China alone has pork producers and soybean farmers seething with anti-protectionist rage.
Continue Reading Below
The president's supporters say the short term blip will lead to long term gain, but now the administration feels obligated to prop up chafing agriculture markets with $12 billion in new subsidies, which amounts to nothing more than farm welfare. The programs that dole out the $12 billion in hush money comes from bureaucracies with names like the Price Loss Coverage and Agriculture Risk Coverage programs, and the Commodity Credit Corporation. Godawful names as though FDR and Karl Marx had ugly babies.
The tariffs and their welfare handouts are no more than pre-midterm salve for rankled farmers who are more than a little resentful to hear closing market doors in the Far East. Kansas Senator Pat Roberts said, "Once you lose a market you lose it... We don't want aid, we want trade!"
This puts part of the economy on the path to centralization, and if it's bad enough for China it's even worse for us. Where do the subsidies end, especially if the tariffs don't work and we do slide into a protracted trade war?
Hopefully China will flinch in this dangerous game of trade chicken, and if not they'll probably slap a tariff on that as well.
Something's gotta give, and that doesn't mean giving handouts to loyal supporters whose votes will plummet like the diminishing returns of their beloved crops and products that are rotting behind the great wall of economic isolationism.