The domestic damage done by President Donald Trump’s imposition of tariffs on Chinese goods will now be exacerbated by the president’s proclamation of his intent to blunt the blow by giving a multi-billion dollar bailout to farmers affected by the fallout.

You read that right.

Not only are American consumers going to bear the burden of President Trump’s trade war with China; they are going to be charged twice, as the president will take $16 billion in tax money to dole out subsidies to the country’s farmers.

In fairness, the president still believes that the tariffs he unilaterally and unconstitutionally imposed on Beijing will be paid for by the Chinese.

“Just so you understand,” Trump said, “These tariffs are paid for largely by China. A lot of people like to say by ‘us,’” he added during his announcement of the farm subsidy scheme.

Sadly, history and math don’t back up the president’s prediction.

Consider this Mises Institute recap of the recent impact on farmers of the ongoing Sino-American trade war.

When China, the European Union, and other important trading partners announced that they would cease or scale back their imports of U.S. agricultural products, prices spiraled down. By September 2018, soybeans had cratered 20%, corn had tumbled 12%, and wheat had fallen 10%. While these commodities have slightly recovered, they are still below their pre-trade-war levels.

Farmers had two main issues throughout the summer: They had nowhere to sell their goods. If they did sell their products, they took a steep loss in lower crop prices.

Hoping to weather the storm, farmers had no other choice but to store their immense inventories of soybeans and grains. They were optimistic, reading every report that claimed a trade deal was imminent. What they got instead were rotting storages and a $12 billion government handout , an insult to these men, women, and families who prefer to partake in commerce rather than depend on the state.

The trade battle began to take its toll on these farms once autumn arrived.

In November, the Federal Reserve Bank of Minnesota found that farm belt bankruptcies had surged. It was reported that nearly 100 farm businesses in Minnesota, Montana, North Dakota, South Dakota, and Wisconsin filed for Chapter 12 bankruptcy. Overall, according to The Wall Street Journal , the Seventh Circuit Court of Appeals processed double the number of insolvency filings from farmers last year; the Tenth Circuit witnessed a 56% jump in 2018.

This trend was inevitable after U.S. farm debt topped $400 billion, a figure not seen since the 1980s, when Chapter 12 bankruptcy was established to assist farmers in coming up with ways to pay off their debts within five years. Moreover, the Department of Agriculture estimated that the typical American farmer household lost more than $1,500 last year, and their incomes are 35% lower than in 2013.

The long and short of that summary is that soybean farmers saw their sales to China plummet to practically zero as a result of the president’s punishment of China. Then, adding insult to injury, President Trump’s solution to the soybean farmers’ economic evisceration was to force Americans to pay for his hubris by bankrolling a $12 billion bailout.

Now, in Round 2 of the Battle with Beijing, President Trump is throwing the same one-two punch combination: spike American agricultural sales to the world’s second-most powerful economy (not to mention the world’s most populous country), then stick the American taxpayer with the tab. Only this time, the bill has ballooned to $16 billion, an increase of over 133 percent!

Writing for, economics correspondent Andrew Moran called conservative icon former President Ronald Reagan as his star witness in his case against the current president’s trade tack.

“In his weekly radio address in August 1985, then-President Ronald Reagan warned about the dangers of placing tariffs and quotas on foreign shoe imports,” Moran writes. “He explained that protectionist policies always lead to long-term hidden costs that make protected industries weaker and harm the consumer.”

“Instead of protectionism, we should call it destructionism. It destroys jobs, weakens our industries, harms exports, costs billions of dollars to consumers, and damages our overall economy,” Reagan explained during the radio address quoted by Moran.

It’s one thing for a Republican to disagree with Donald Trump, but it’s another thing altogether to convince one to criticize Ronald Reagan. So, when Reagan paints a plan like that being followed by President Trump as “destructionism,” one would think the GOP rank-and-file would call on the current Oval Office occupant to reconsider his trade policy and the potential knock-out blow that that policy could deal to farmers and every other taxpayer in America.

Reagan and Trump may disagree on the wisdom of protectionist trade policies, but no one can deny the decay these policies have caused in the agricultural sector, particularly family farms.

Here’s a harrowing and heartbreaking facet of the farm subsidy story told by Moran in an article published in March:

“Simply put, the domestic agriculture sector may take years to recover fully. Perhaps this alone is contributing to the increasing suicide rates in the profession. It is true that the rate was already high before the trade war – 84.5 per 100,000 people – but experts contend that this bad situation might get worse.

“Jennifer Fahy, communications director with Farm Aid, said in an interview with CBS News:

“‘The farm crisis was so bad, there was a terrible outbreak of suicide and depression. [Today] I think it’s actually worse. We’re hearing from farmers on our hotline that farmer stress is extremely high. Every time there’s more uncertainty around issues around the farm economy is another day of phones ringing off the hook.’”

So, beside the bewildering fact that the president has somehow convinced conservatives to pay double for his protectionist policies by supporting tariffs — the cost of which is always borne by American consumers — and supporting federal farm bailouts — also charged to the taxpayer, but his mathematically and constitutionally suspect strategy could do permanent damage to our country’s farmers and to its financial future.

The last word will go to one of the Founding Era’s most insightful constitutional scholars and U.S. Senator John Taylor of Caroline, who simplified the confusion question of who pays for tariffs and how they always hurt agriculture:

Intricate as the science of political economy has been rendered, by the artifices of exclusive privileges, it yet contains some principles so undeniable, as to explode the whole mass of partial and perplexing calculations, used to conceal or evade them.

Among these principles the most important is, that land is the only, or at least the most permanent source of profit; and its successful cultivation the best encourager of all other occupations, and the best security for national prosperity. If this principle can maintain itself against the sophistry of exclusive privileges in any country, it must be in the United States.

If the cultivation of land flourishes, all other occupations prosper; if it languishes, they decay.

Joe Wolverton, II

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