But while the White House is considering the idea as a way to protect farmers if China slaps tariffs on U.S. agricultural products, some GOP lawmakers have told the administration that the approach will not work. The program, the lawmakers say, will not be able to provide the needed relief to farmers, and using it will further inflame trade tensions with China.
The CCC can borrow up to $30 billion from the Treasury Department and extend that money to farm groups. If U.S. farmers see orders from China plummet because both countries create new layers of tariffs on imports, the White House wants to set up a bailout program for the U.S. agriculture industry.
No final decisions have been made, and the two people familiar with the situation spoke on the condition of anonymity to discuss the internal deliberations. The White House and the Agriculture Department would not comment on the CCC idea, saying they wanted to keep their strategy to help farmers secret for now.
“The President has directed the Secretary to use the authorities he has to protect farmers,” the USDA said in a statement. “It wouldn’t be prudent to give away our playbook and let China know exactly how we would plan to mitigate what they have threatened. But we can say this: we will not allow our agricultural producers to bear the brunt of China’s retaliation, as we defend our own interests as a nation.”
Some lawmakers are telling the White House not to pursue this approach. They are still trying to persuade Trump to stop short of engaging in a trade war with China, as Beijing has threatened to impose tariffs on U.S. agriculture products.
“CCC is used for emergency items,” said Senate Agriculture Committee Chairman Pat Roberts (R-Kan.). “I know it has been misused in the past. I’ve seen that up front.”
He said he has told the White House that the best approach is to ensure farmers have a market to sell their products into, not a financial incentive for the products to sit idle.
“It’s not that I’m diametrically opposed to it to the degree that I’d say no. I’m just saying I don’t know how we implement this, I don’t know what kind of cockamamie scheme that we could come up with that would be fair, that would be at least somewhat responsible,” Roberts said.
He is one of a number of GOP lawmakers who are planning to meet with Trump on Thursday to discuss the White House’s adversarial approach to trade policy with China.
Sen. Joni Ernst (R-Iowa) has also raised warnings about the administration’s approach, saying any changes should ensure farmers maintain high levels of production and should not be designed to provide artificial subsidies.
“Farmers want to be productive,” she said. “They want their goods and commodities going to new and developing markets.”
Trump is trying to impose tariffs on steel and aluminum imports from China and Japan. He is also threatening to impose tariffs on more than $150 billion in other exports from China if it does not take steps to reduce what he views as a trade imbalance. Beijing has responded by threatening to retaliate with tariffs of its own, particularly aimed at the U.S. farming industry. U.S. farmers exported $21 billion in goods to China in 2016, and they fear a major disruption if Beijing slaps tariffs on pork, soybeans, fruit and other products.
This has led to a panic from farmers, who are leaning on lawmakers such as Roberts to intervene before their orders plummet.
The threat has already led to wild gyrations in commodity prices, particularly for soybeans.
Erica Werner, Seung Min Kim and Caitlin Dewey contributed to this report.