Trade War Fallout: $38.95B in Tariff Bailout Payments
The Tariff Trigger
In early 2018, the Trump administration imposed tariffs on hundreds of billions of dollars' worth of Chinese goods. China retaliated with tariffs targeting American agriculture — soybeans, pork, dairy, and other commodities. Overnight, U.S. farmers lost access to their largest export market for soybeans.
Soybean prices crashed. China redirected purchases to Brazil. U.S. farmers, many of whom had planted based on expected Chinese demand, faced devastating losses. The administration's response: the Market Facilitation Program (MFP), which made direct payments to farmers affected by retaliatory tariffs.
💡 Key Insight
Farm subsidy spending jumped from $6.35B in 2017 to $15.23B in 2018 — a 140% increase in a single year. By 2019, it reached $23.72B, nearly 3.7x the pre-trade war level.
The Market Facilitation Program
MFP was created using the USDA's Commodity Credit Corporation (CCC) authority — bypassing the normal congressional appropriations process. In Round 1 (2018), the USDA authorized up to $12 billion. Round 2 (2019) expanded the program to $16 billion. Payments were based on planted acreage and county-level trade damage estimates.
Soybean farmers received the largest share, given that China had been the top buyer of U.S. soybeans. But the program also covered cotton, sorghum, wheat, dairy, hogs, and other commodities. Critics argued the program disproportionately benefited large operations and did little for farmers who weren't directly affected by Chinese tariffs.
The Spending Timeline
| Year | Total Spending | Payments |
|---|---|---|
| 2017 | $6.35B | 2,276,899 |
| 2018 🌐 | $15.23B | 3,538,051 |
| 2019 🌐 | $23.72B | 5,579,359 |
| 2020 | $38.73B | 6,111,541 |
| 2021 | $9.19B | 1,574,436 |
A Precedent for COVID
The trade war bailout set a crucial precedent. It demonstrated that the USDA could rapidly deploy billions in direct payments outside the normal farm bill process. When COVID hit in 2020, the infrastructure and political will for massive emergency payments was already in place. The trade war era proved that ad hoc, multi-billion-dollar payment programs could be created quickly — a lesson that would be applied on an even larger scale during the pandemic.
Winners and Losers
Midwestern soybean and corn states — Iowa, Illinois, Indiana, Minnesota — saw the biggest jumps in spending. Southern cotton states also benefited significantly. Smaller, diversified operations and specialty crop farmers received relatively little, despite also facing market disruptions from retaliatory tariffs.
📊 Data Source
Analysis based on USDA Farm Service Agency payment records, 2017-2025. Trade war era programs include Market Facilitation Program (MFP) Rounds 1 and 2, and related CCC payments.