Federated Farmers is dismayed at a $US12 billion plan to shield American farmers from fallout in a trade war with China.
The Trump administration said it would use a Great Depression-era program to pay up to $12 billion to help US farmers. Photo: AFP
Beijing cancelled orders for American crops in an intensifying trade war with the US.
Many US farm states vote Republican, but Republican candidates in looming congressional elections are worried about their electoral chances, so the Trump administration has offered farmers a package worth almost $NZ18 billion.
The Trump administration said it would use a Great Depression-era program to pay up to $12 billion to help US farmers.
The relief package is intended as a temporary boost to farmers as the US and China negotiate over trade issues, officials said.
It is a clear signal US President Donald Trump is determined to stick with tariffs as his weapon of choice in the conflict.
Federated Farmers said that when large countries battle each other on trade, there is a risk of small countries getting caught in the crossfire.
It said trading nations like New Zealand work best when everyone agrees on the rules of international commerce, and uncertainty caused by trading disputes is the last thing farmers need.
The rural advocacy organisation's vice president Andrew Hoggard said the conflict was a worry for trading countries like New Zealand which depended on a consistent rules-based trading system.
Federated Farmers vice president Andrew Hoggard Photo: Radio NZ / Jemma Brackebush
Mr Trump, speaking at an event in Kansas City on Tuesday, reaffirmed his support for tariffs and pledged that "farmers will be the biggest beneficiary".
"Just be a little patient," Mr Trump said.
The administration's action appeared to divide Republicans, with some praising the move and others troubled by what they viewed as the kind of widespread government-assistance program their party has traditionally opposed.
"This trade war is cutting the legs out from under farmers and the White House's 'plan' is to spend $12 billion on gold crutches," said Senator Ben Sasse, of Nebraska who frequently criticizes the president, a fellow Republican.
Short term boost
Farmers have been a particular target in the current clash over trade policy as other countries seek to retaliate for Mr Trump's duties on Chinese goods as well as on steel and aluminium imports from the European Union, Canada and Mexico.
Those affected economies have in turn targeted US agricultural products, including soybeans, dairy, meat, produce and liquor.
Scott Irwin, an agricultural economist at the University of Illinois said: "We have never compensated farmers directly on such a large scale for retaliatory tariffs."
The news lifted shares of farm equipment companies on the prospect that farmers will have more money to spend on tractors and other farm gear.
- RNZ / Reuters