What did Donald Trump do today?
He declared yet another bailout to fix yet another trade war farm crisis.
During his first term, Trump raised tariffs on Chinese goods to an extent that had not been seen since the Great Depression. The result was reciprocal tariffs on American farm exports to China that immediately drove farms into bankruptcy and a shocking number of farmers to literal suicide. The only way to save the agricultural sector from that self-inflicted wound was a bailout, or rather three rounds of bailouts.
Trump's second term trade war is much bigger than the first, and its consequences are already even more severe for American agriculture. (Even Trump's own Agriculture Department acknowledges how bad it has gotten.) China has completely abandoned the American soybean market, and the corresponding glut is once again killing farms. That is forcing Trump to once again promise a farm bailout, which he did on his private microblogging site today:
The Soybean Farmers of our Country are being hurt because China is, for “negotiating” reasons only, not buying. We’ve made so much money on Tariffs, that we are going to take a small portion of that money, and help our Farmers. I WILL NEVER LET OUR FARMERS DOWN! Sleepy Joe Biden didn’t enforce our Agreement with China, where they were going to purchase Billions of Dollars of our Farm Product, but Soybeans, in particular. It’s all going to work out very well. I LOVE OUR PATRIOTS, AND EVERY FARMER IS EXACTLY THAT! I’ll be meeting with President Xi, of China, in four weeks, and Soybeans will be a major topic of discussion. MAKE SOYBEANS, AND OTHER ROW CROPS, GREAT AGAIN!
In other words, what Trump is saying is that the money from the taxes American consumers are paying on Chinese goods will be used to bail out the farms that are failing because of those same taxes.
And this is correct—instead of American farmers selling crops to China and making a profit that way, American consumers will pay extra taxes to bail out farmers whose crops are rotting in the fields or being sold for pennies on the dollar. (That is, assuming Trump actually gets around to paying the promised bailout funds in time to do some good, something he's struggled with in the past.) Bailouts are unpopular in general, but they're extremely unpopular with farmers, who make more money and more reliably when they can actually sell their crops.
Trump is also admitting, whether he realizes it or not, that China's pressure on him is working, and that Xi Jinping can force him to give up other concessions in exchange for giving him a political win on the "major topic of discussion." Trump, who appears to genuinely believe that he is a master negotiator, frequently struggles with basic concepts like "don't tell your opponent how they can most effectively pressure you."
He's also had difficulty with "your opponent will act in their best interests, not yours" and "don't give things away for free" and "nobody will give you anything for free" and "don't expect your opponent to help you deceive your own side."
Why does this matter?
- A policy that costs tens of billions of taxpayer dollars to fix and cripples a major economic sector is a stupid policy.
- Doing it a second time, except more so, is that much stupider.
- Presidents who can't admit they made a mistake never learn from their mistakes, and presidents who can't learn aren't fit for office.