Treasury Secretary Scott Bessent said Thursday U.S. farmers could see an announcement on a “substantial support” package as soon as Tuesday to deal with the fallout from the trade tensions with China.
“It's unfortunate that Chinese leadership has decided to use American soybean farmers as a hostage or pawn in the trade negotiations,” Bessent told CNBC. “You should expect news on Tuesday on substantial support for our farmers.”
Soybean farmers have been warning of a dire financial situation in farm country if China continues its freeze on U.S. purchases. Chinese buyers have not yet placed any orders for the new U.S. crop, and Chinese officials have suggested they won’t until the U.S. removes some tariffs.
President Donald Trump said last week that he is looking at diverting some tariff revenues to farmers to offset export losses. Senators on Capitol Hill have also been examining ways to use new duty receipts to support farmers, including lifting spending restrictions on Section 32 – a mechanism that allows tariffs receipts to support farm purchasing power.
Sen. John Hoeven told Agri-Pulse lawmakers aim to be “ready to go when the president and secretary decide it's time to move forward” with any assistance plan. Hoeven said the farm assistance will give Trump needed leverage in negotiations with China.
Bessent said he met with Agriculture Secretary Brooke Rollins and Trump in the Oval Office on Wednesday to discuss the issue.
Whether the administration can create a mechanism to funnel tariffs to farmers without going through Congress remains unclear, however. Multiple legal analysts have told Agri-Pulse in the last week that they are not aware of any legal mechanism, but didn’t rule out the possibility of administration lawyers finding a novel approach to act unilaterally.
Soybean farmers have "had President Trump's back, and we've got their back," Bessent said.
Bessent also demonstrated his understanding of some of the knock-on impacts of China’s retreat from U.S. ag.
“This is a record harvest,” Bessent pointed out. “The harvest is so big that we may run out of storage. So that's also affecting prices.” In addition to providing tariff support, Bessent said the administration would work to “make sure that the farmers have what they need for next planting season.”
Bessent also previewed a “big breakthrough” in U.S.-China trade talks once Trump and Chinese President Xi Jinping meet in Korea at the end of the month.
“Our fifth round of talks should show a pretty big breakthrough,” the treasury secretary said. “And we can start talking about things,” including “ag purchases,” Bessent added.
The two sides reached a temporary truce earlier this year to remove the steepest duties on each other’s exports. That détente is set to expire in November, but both sides have previously extended it before the deadline.
Bessent, and Rollins in her own appearance on Fox Business on Thursday morning, reiterated that China never lived up to its agriculture commitments under the phase one deal. Beijing was supposed to buy around $80 billion of U.S. commodities under the pact in 2020 and 2021, but bought around $61 billion.
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Trump, Rollins said, is "unwilling to let any of this slide."
U.S. Ambassador to China David Perdue also raised the issue of China's unfilled 2020 and 2021 purchase commitments during a closed-door meeting with Republican senators earlier this week, Iowa's Sen. Chuck Grassley said.
Bessent also used the CNBC interview to defend the administration’s decision to offer economic support to Argentina at a time when China is looking to alternate buyers for its soybeans – including Argentina.
“What we're doing is maintaining a U.S. strategic interest in the Western Hemisphere,” Bessent said. “You don't want to create another failed state.”
The treasury secretary pushed back on the idea that the U.S. putting money directly into Argentina’s economy.
“Just to be clear, we are giving them a swap line. We are not putting money into Argentina,” Bessent stressed. Swap lines allow foreign central banks to sell their currency to the U.S. Federal Reserve in exchange for dollars to foster financial stability.
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