Dropped Tariffs Could Mean Less USDA Trade Aid Relief

Ag groups are largely supportive of the new USMCA trade package.  However, many of those same groups say their biggest concern right now is ending retaliatory tariffs on U.S. agricultural products.  Those duties were put in place after President Trump imposed tariffs on steel and aluminum imports.

Ag Secretary Sonny Perdue told Reuters last week that, with a trade deal in hand, the tariffs usefulness when it comes to Mexico and Canada have diminished.

“I think it’s time we go back to our previous relationship which had no tariffs on steel and aluminum,” Perdue added.  If that happens, it could mean USDA will scale back on the second installment of its trade aid program.  Perdue told Reuters, “If the tariffs do come off and the tariff impact lessens, it will have some impact over the mitigation efforts because those efforts were based on the fact that they would be tariff damage-related.”

USDA has already made $6.3 billion available for direct payments to farmers, commodity purchases, and marketing assistance.  The department was scheduled to decide on a possible second round of trade reimbursements by early December.  The agency had initially budgeted up to $12 billion for the aid program.

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