In a briefing call on July 24, Perdue and top department officials explained that the financial boost is created to provide temporary relief to farmers as the United States negotiates long-term trade deals.
This, says Ag Secretary Sonny Perdue, will let the president work on "long-term trade deals" he vows will make up for losses. Trump has threatened to place tariffs on all $505 billion worth of Chinese goods imported by the US.
The president's proposal was announced Tuesday in response to retaliatory tariffs imposed by China and other countries. The report's deadline is February 2019, but it is now expected by late August/early September.
Brussels already retaliated against the steel and aluminium tariffs, imposing punitive duties on over US$3 billion (S$4.09 billion) of United States goods, including blue jeans, bourbon and motorcycles, as well as orange juice, rice and corn. The Department of Agriculture will determine the payment to each farmer based on the size of a crop multiplied by a specific subsidy rate. The Trade Promotion Program will help farmers seek out new export markets. "The answer is remove the tariffs".
Trade analysts say the United States has not pursued such aggressive trade policies in decades.
The United States is engaged in an escalating tit-for-tat tariff exchange with China. Since March, he has imposed blanket tariffs on almost all imports of steel and aluminum and placed penalties on $34 billion in goods from China, a total likely to increase to $50 billion next month and into the hundreds of billions later this year. Juncker will seek to avert such a unilateral move, by making an offer, but only if the U.S. lifts its punitive tariffs on European steel and aluminium.
The president has said that he favors free trade but uses tariffs as leverage.
He tweeted on Tuesday: "Tariffs are the greatest!". Trump wrote on Twitter on July 24.
"The European Union is coming to Washington tomorrow to negotiate a deal on Trade", Mr Trump said. It's as simple as that-and everybody's talking! "All will be Great!" "The question is: Will that be strong enough to offset the idea that we have to get tough on our trading partners, and that our jobs are being stolen overseas?" Not any longer folks. "Now they have to pay, '" Reinsch said, echoing the president's argument.
"Right now, we're looking at beans used to be 10 bucks, now they're down to 8 bucks", Kestel told CBS News' Adriana Diaz.
Colorado farmers like Robert Sakata say they'd rather have trade than aid, but with plummeting commodity prices, they need relief. "You watch. We're opening up markets".
He added: "Pretend someone smashed your auto, and then someone said, 'Don't worry, I will give you a ride to the next place you have to go.' Well, thank you, I appreciate the ride, but what am I going to do the next 10 rides I need after that?"
"Just be a little patient", Mr Trump said. "They should do this by working with Congress to ensure farm bill programs provide enough assistance to farmers when markets collapse". John Thune, whose state produces significant pork, soybeans and grains, slammed the decision to offer farmers aid without fixing the root problem.
Coming up: The US is also considering additional tariffs of more than $200bn on Chinese products, as well as duties on foreign cars and auto parts, which represent more than $300bn in annual trade. I get that. But it's not a long-term fix.
China is the largest buyer of US soybeans, importing about $14 billion worth of the legume in 2016, according to the US Department of Agriculture. The slow-down affects the marketability of perishable products.