Three US companies based in Louisiana and Texas are suing the US Department of Agriculture over policies created by the Trump Administration they say violate the Fifth Amendment.
Citing the USDA's payout of tens of billions of dollars to farmers and some seafood companies since 2018, along with the significant losses suffered from Trump's trade war tariffs, the companies say the department's actions provide "unequal protection and favoritism to the farming industry and farmers from the serious financial impacts of the tariffs to the exclusion of other industries."
The companies are Harris County, Texas-based Houston Seafood Company, and Harvey, Lousiana-based companies Gulf Marine Product and Ningbo Trading Company.
A lawsuit filed by the companies Wednesday in a US district court in Texas states that by "providing monetary bailouts in the billions of dollars to the farming industry, defendants are showing monetary favoritism to one industry to the exclusion of others for the sole purpose of ensuring the farming industry’s support for the current administration in the 2020 presidential election which is not a rational basis for doing so and which is contrary to established standards relative to government bailouts and in direct contravention of the United States Constitution."
The plaintiffs say they have suffered "hundreds of thousands of dollars in losses as a direct and proximate result of the tariffs."
Houston Seafood Company says it has paid over $641,000 (€539,848) more for product and brokerage fees as direct result of the tariffs. Gulf Marine notes in the lawsuit it paid more than $487,341 (€410,437) because of the tariffs for its products and fees with Ningbo paying more than $730,000 (€614,804) for its products and fees directly due to the higher costs and lower profit margins due to the imposed tariffs.
"These are significant losses for companies that are now struggling with COVID-19. Yet, there has been no mention of any federal bailout for the wholesale seafood business," the lawsuit states.
In relation to the USDA payments, the lawsuit says around $19 billion (€16 billion) of that money had been paid out by the end of 2019, and the rest will be paid in 2020 with recent reports indicating that the payouts may be as large as $56 billion (€47 billion) dollars by the end of this year.
IntraFish data shows that through 2020 the USDA awarded US seafood companies over $100 million (€84.2 million) for federal food and nutrition assistance programs.
"Irrespective, they are just the proverbial drop in the bucket compared to what's been doled out to the farmers further reinforcing the argument that Trump cares more for the farmers and their votes than anyone else," Texas-based attorney Kevin Michaels, who is representing the plaintiffs in the lawsuit, told IntraFish.
Earlier this year the National Oceanic and Atmospheric Administration (NOAA) allocated $300 million (€275 million) in aid for fishing, aquaculture and processing businesses that have incurred direct or indirect economic losses from the coronavirus pandemic.