Who Gets the Trump Bailout This Time?

You paid for a farm bailout in his first term. The line of outstretched hands will be longer.

Official White House Photo by Shealah Craighead

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Just after the 2008 election, as the economy was spiraling into what would be called the Great Recession, once and future presidential candidate Mitt Romney wrote an op-ed for the New York Times counseling some tough love for car makers. With the industry suffering an existential crisis as sales went into freefall, Romney wrote that “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.”

Romney’s op-ed was published under the dramatic headline “Let Detroit Go Bankrupt,” which caused him a good deal of grief when he ran for president in 2012. The auto makers did get a bailout, first from President Bush and then from President Obama, and Romney was wrong: The industry survived. I thought of titling this piece “Let the Farmers Go Bankrupt,” except that’s not really what I’m arguing.

Instead, what we need to know is this: There is a bailout coming. It could take a variety of forms and have multiple beneficiaries, but the government will be using taxpayer money to pay off the victims of Donald Trump’s disastrous economic policies. Some of them, anyway.

Farmers will almost certainly be first in line to be bailed out. They’ll need it, because just as happened in Trump’s first term, they’re among the hardest hit by the trade war he has begun, and he sees farmers as loyal supporters who by voting for him have earned the right to have the government come to their rescue.

The rest of the lucky industries, companies, and groups are yet to be determined; they might be other industries that rely on exports, or even whole geographic regions affected by the recession when it comes. What’s certain is that they will be selected according to whether Trump believes they have shown him the proper devotion and paid the proper tribute.

Past is prologue

The tariff policy in Trump’s first term was essentially a pilot program for what he’s doing now. It was much more limited in scope, probably because Trump had economic advisers around him who were both relatively sane and willing to speak up when he proposed something dangerous. Today, even the sane people in Trump’s administration cannot dissuade him from this tariff folly, and they may not even be trying.

What we saw then was predictable: Trump imposed a bunch of tariffs, especially on China, and the targets of those tariffs retaliated in kind (and it should be noted that President Biden kept many of the tariffs on China in place). That hit American farmers hard, because China had become a key market for exports, especially of crops like soybeans. When China started looking elsewhere for those goods (Brazil, for instance, makes lots of soybeans), American farmers were left without one of their key customers.

What happened next? Trump bailed them out. Specifically, he took 92% of the revenue raised by his tariffs and sent it in the form of a bailout to farmers who had been harmed by his policy — over $60 billion worth. So in effect, the American consumers and manufacturers whose costs were raised by the tariffs subsidized farmers so they could be made whole.

It wasn’t the farmers’ fault, so it’s hard to be too angry with them. But the whole thing was pointless. It was just a transfer from the broad population of taxpayers to a small subset of them, and it accomplished nothing — no revitalization of American industry, no wave of job creation, nothing.

This trade war could be even worse for American farmers than the last one, and Trump will probably give them another bailout, since the political calculation hasn’t changed. Not only does Trump like farmers since he performed so well in rural areas, he also knows that it would be a very bad look if farmers started showing up on the news saying “I’m losing my farm because of Trump’s stupid trade war. He ruined my family’s legacy.” After all, farmers are considered not just important for the food they provide but uniquely virtuous:

But it won’t just be farmers. In Trump’s government, a tariff system also necessarily includes a robust waiver system, a way for companies and industries to come before him, bend the knee, and beseech him to excuse them from having to pay the tax on their imports. In his first term, waivers were more likely to be granted to companies that had donated to Republicans, and it’s a good bet that the system will be super-charged. If you want to get a waiver, you might consider buying some of Trump’s scammy meme coin, or maybe a few thousand Trump Bibles, to demonstrate why you deserve special consideration.

That will apply to bailouts, too: If any large group, industry, or area of the country shows enough fealty to Trump, they may be able to get their own bailout from the effects of his tariffs.

The limits to bailouts

That might work out for those most acutely affected, but what if the tariffs plunge the entire country into recession? Can you bail out consumers as a whole? Technically, sure. We’ve done it many times before, most recently when the government gave stimulus checks to everyone during the pandemic, at a total cost of over $800 billion. But to justify it, you have to come before the public and say “We have to do this because we’re in an economic crisis and everyone is suffering.” The problem for the administration and Republicans is that what’s happening now is 100% the fault of Donald Trump, and there’s no way to claim otherwise. There’s no virus or out-of-control derivatives traders to blame it on. It was Trump’s decision, and everyone knows it.

Right now they’re saying that everything’s fine and we’re experiencing just a brief moment of discomfort that will inevitably be followed by a glorious dawn of limitless prosperity. As things get worse, I imagine that will continue to be their argument: Just hold on, the gold-plated future is on its way. Any day now.

If the official GOP line is and will remain “There is no crisis,” it will be awfully hard to argue that we must give direct (and very expensive) relief to all of the American public. Instead, the bailouts will have to be selective, and Donald Trump will be the one doing the selecting. He’s not going to want to bail out a bunch of blue-state haters or companies that contribute to Democrats.

But there will be bailouts large and small. When the larger ones come, they will be presented as the heroic president coming to the rescue of a victim of vicious foreigners. But look closely: The ones who get saved will already have issued a payment directly to Trump, either in votes or cold hard cash.