Trump could bail out farmers hurt in his trade war, again. Here’s what happened the first time.

Soybeans being loaded from a grain bin onto a truck. (Photo by Scott Olson/Getty Images)

When Donald Trump returned to the presidency, he restarted the trade war he had initiated during his first term. The major buyer for U.S. soybeans has been China, but the country has bought none this year. Prices for the commodity are so low that some farmers told PBS News they’re storing their product in hopes of an economic recovery — repeating what happened during Trump’s first foray into tariffs.

With farmers strapped, Trump is reportedly considering another bailout, this time for $10 billion.

During his last trade war, the Trump administration paid farmers through the USDA’s Commodity Credit Corporation, often referred to as a “credit card” that helps address farmers’ shortfalls. It has typically been used for relatively small amounts of assistance, but the first Trump administration used it to provide more than $20 billion in subsidies, the largest chunk of change in the corporation’s history.

Congress has the power of the purse, but the move bypassed congressional approval, and the administration appears to be attempting the same maneuver this time. The corporation’s fund only has $4 billion left, so officials could tap money from tariffs — which American consumers pay — to make up the difference, according to Politico.

Beyond that, it’s unclear how the payments will be made or who will benefit.

It’s also become unclear in recent days if the bailout is coming. Politico reported this month that the government shutdown could mean no money is available.

The first bailout, known as the Market Facilitation Program (MFP), was criticized for not evenly distributing its assistance, as InvestigateTV and Investigate Midwest found in 2022. For instance, farmers producing the same crop received different payments.

Also, beginning farmers and historically underserved farmers received paltry sums. High-income farms, on the other hand, received massive assistance.

An analysis by U.S. Senate Democrats found MFP payments were concentrated in Southern states, despite soybeans — which are primarily grown in the Midwest — being the original commodity in dispute. “The Administration’s trade assistance continues to pick winners and losers,” Democrats charged.

A legal architect of the first bailout was Stephen Vaden, who served as the USDA’s general counsel in Trump’s first term. He’s currently serving as the USDA’s deputy secretary, the No. 2 to Agriculture Secretary Brooke Rollins.

In 2019, the Senate asked Vaden about the discrepancies: “Since MFP was established to address the China trade dispute, how do you explain to soybean growers why cotton growers should receive more financial help than them?”

Vaden defended the MFP by saying it was intended to include “commodities both directly and indirectly affected by the trade dispute, in order to minimize potential distortions. … Soybean farmers are receiving assistance according to the trade damage they have faced.”

Farm groups have repeatedly said they want free trade with the rest of the world, but after the MFP, experts predicted the massive infusion of subsidies would train farmers to expect assistance during rough financial times.

“I think, without a doubt, this has set an expectation that whenever there are bumps — or perceived bumps — in the road, that the USDA will automatically trigger out payments in one form or another,” Johnathan Coppess, an agricultural policy expert at the University of Illinois, told InvestigateTV and Investigate Midwest in 2022.

This article first appeared on Investigate Midwest and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.