WASHINGTON (July 28, 2020)—The Trump administration’s trade wars have been a disaster for American agriculture. As a result, the Trump administration has showered expensive subsidies on farmers and ranchers to mitigate the damage.

The trade wars have been quite problematic for American farmers and ranchers. However, the broken subsidy regime predates the Trump administration. For years, we have provided subsidies that flow primarily to wealthy farmers and ranchers, which are costly to taxpayers, damage the environment and inhibit our ability to open more foreign markets to American agricultural products.

In a new paper, R Street trade policy counsel, Clark Packard, argues that American taxpayers, the environment—including water quality—and our trade relations would all improve if policymakers in the United States made meaningful cuts to our domestic agriculture subsidies.

“The current farm safety net is full of misaligned incentives that are costly for taxpayers and lead to overproduction, which damages the environment while hurting our ability to open foreign markets for more American products,” he said. “By making smart policy choices today that responsibly curb agriculture subsidies, we can begin to rectify our fiscal outlook, improve water quality and the environment more broadly, and reach closed, foreign markets.”

He argues that as a preliminary matter, the United States should eliminate its recently enacted tariffs on imported steel, aluminum and products from China. If the United States removed these tariffs—which have been an economic disaster for the country—our trading partners would remove their retaliatory tariffs. He also finds that by imposing tighter limits on domestic agriculture subsidies, the United States could jumpstart multilateral trade liberalization negotiations at the World Trade Organization (WTO).

To read the full report, check out “Agricultural Policy for the 21st Century.”

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