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Trump’s Bailout of U.S. Farmers Hit by His Trade War With China? It May End Up Aiding a Giant Chinese Company

October 26, 2018, 10:10 AM UTC

In a deeply ironic twist to President Trump’s trade war with China, a giant Chinese company stands to make big money from the Trump administration’s bailout of the agricultural sector, which was necessitated by retaliatory tariffs from China on U.S. foods.

Confused? Fair enough; the explanation will follow shortly. But if you’re annoyed, you’re not the only one—Republican Senator Chuck Grassley (himself a farmer who will benefit from the bailout) is deeply unhappy about the situation.

Earlier this year, the Trump administration started imposing major tariffs on imports from China, the EU, Canada and Mexico. These prompted retaliatory tariffs, with many countries deliberately targeting Trump’s heartland base, in order to sway opinion against the president ahead of the midterms. That meant tariffs on imports of U.S. agricultural products—including 62% tariffs imposed by the Chinese on U.S. pork.

To stop those measures hitting American farmers too hard, the White House decided to dole out up to $12 billion in emergency aid, with a focus on the Midwestern states that backed Trump in 2016.

Earlier this week the Washington Post reported that Smithfield Foods was eligible for some of that federal bailout. Specifically, Smithfield will be able to offload some of its surplus pork to the Agriculture Department, which will pay for it and distribute it to food banks.

Smithfield, based in Virginia, is one of the two biggest pork producers in the U.S. It also happens to be owned by a Chinese conglomerate called the WH Group—the biggest pork producer in the world.

Grassley, who was no fan of Trump’s trade war to begin with, took to Twitter on Thursday to express his disbelief.

“I don’t understand why Chinese owned Smithfield qualifies for [Agriculture Department cash] meant to help our farmers,” the Iowa senator, who is on the Senate agriculture committee, spluttered. Smithfield, he added, seemed to be a “can’t lose” situation, with U.S. taxpayers paying the bill.

According to the Post, Grassley is now considering asking the White House to make Smithfield ineligible for the bailout—though the company hasn’t actually applied for it yet.

“[Grassley] cares a lot about fundamental fairness when it comes to these programs,” the senator’s spokesman told the paper. “And it appears that taxpayer money will go to a state-owned enterprise as a result of that state’s tariffs.”