President Trump giving farmers $12 billion shows how much he doesn't understand policy

 Source: Washington Post

Source: Washington Post

Trump's policies are hurting his own supporters, in fact farmers are losing money because of Trump's tariffs. To help these farmers, the Trump Administration announced that they will provide up to $12 billion in emergency relief for farmers. Put simply, this is a terrible idea.

The Trump Administration's Rationale

First of all, let's go through the Trump administration's rationale. First, President Trump thought that countries are ripping off the United States with unfair international trade agreements. So he decided to increase tariffs on these countries. Then Trump saw that the countries he placed sanctions on are responding by placing sanctions on the US. Then Trump sees that these tariffs are hurting America, but instead of removing the tariffs, he offers farmers a $12 billion aid package. There’s several problems with this logic.

The Benefits of International Trade and Policy Analysis

Trump treats international trade like it’s a zero sum game, when it’s actually not. Free trade often benefits multiple countries while barriers to trade hurts multiple countries. For example, free trade between nations gives countries an opportunity to produce more of the goods that they produce best, leading to the economies of both countries becoming more efficient. This means that Trump really should not have increased tariffs on countries in the first place. Also, he should have at least made the decision to remove the tariffs that he placed on foreign countries once he saw the problems the tariffs are causing for Americans. However, even before Trump increased tariffs, his administration should have conducted a policy analysis that researched the possible ramifications of increasing tariffs. This would have likely led to the discovery that increasing tariffs would likely injure American farmers and the Trump administration could have taken this into consideration while deciding if they should increase tariffs.

A Political Bandaid

Instead of removing the tariffs, President Trump decided to put a political band-aid on the situation by announcing that he will offer farmers $12 billion in emergency relief. When first looking at the situation, it may seem like a good idea to give farmers $12 billion, but this is just a temporary fix. No one knows how long this money will last, which farmers will be eligible for the money, and how much money each farmer will receive. Really, if you think about it, this emergency relief money seems to be a political ploy to make sure Republicans gain support from local farmers during the upcoming elections.

However, even if Trump decides in the future to remove tariffs, it may already be too late. The countries that trump imposed tariffs on are likely searching for agricultural products from producers in areas outside the US. And once a country switches producers, it's unlikely that even with tariffs removed the country will go back to receiving goods from American producers.