The programme would pay up to $12bn to subsidise farmers, intended as a temporary boost while trade negotiations take place.
Sonny Perdue, secretary of the Department of Agriculture, said on Tuesday: “This obviously is a short-term solution that will give President Trump time to work on a long-term trade policy.”
Farmers have particularly been affected by the trade war, as countries seek to retaliate for Trump’s duties on steel and aluminium.
Affected countries, including China, European Union nations, Canada and Mexico, have targeted US agricultural products, such as soybeans, peanuts, orange juice, dairy, meat products.
According to the Department for Agriculture, the US exported $138bn in agriculture products in 2017, including $21.5bn of soybeans.
Shortly after the US administration’s announcement about the funds, Trump called for the EU to “drop all tariffs, barriers and subsidies”, in a tweet.
Ahead of European Commission president Jean-Claude Juncker visit to Washington, he said both the US and the EU should drop tariffs to lead the way to a “free market and fair trade”.
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!
— Donald J. Trump (@realDonaldTrump) 25 July 2018
Earlier this month, the International Monetary Fund warned that rising trade tensions between the US and the rest of the world could cost the global economy hundreds of billions of dollars.