The move would be the first expansion of U.S. tariffs on Chinese goods since a similar tax was imposed on US$34 billion worth of goods on July 6.
The aid "will provide a welcome measure of temporary relief to our farmers and ranchers", said Zippy Duvall, president of the American Farm Bureau Federation, the largest American farmer group.
This is a sign the trade war is hurting Midwest farmers, including tens of millions of dollars of damage in Minnesota - especially to soybean farmers.
Exports now account for about 20% of farm income in the U.S., but farmers worry the escalating tariffs will reduce demand for their goods.
Sen. Jerry Moran of Kansas says, "When the tariff war is over... how do we get those markets back?"
The Agriculture Department is announcing a $12 billion "short-term" plan to help US farmers hurt by retaliatory tariffs.
On a conference call with reporters earlier Tuesday, Trump administration officials said the $12 billion was "one time" action. Officials said the plan would not require congressional approval and would come through the Commodity Credit Corporation, a wing of the department that addresses agricultural prices.
The planned mix of direct payments to farmers, commodity purchases for food-aid programs, and stepped up promotion of new export markets buoyed markets looking for new sources of demand for US products. "I look forward to reviewing the details of the President's proposal and continuing to work with the Administration to find permanent solutions that will give confidence and certainty to our farmers as soon as possible". That's according to two people who have been briefed on the plan who spoke on condition of anonymity ahead of a formal announcement.
Agricultural goods covered would include major commodities like soybeans, wheat and milk as well as crops including legumes and nuts, depending on the program.
Trump did not specifically reference the plan during a speech to veterans in Kansas City, but asked for patience as he attempts to renegotiate trade agreements that he said have hurt American workers.
Extra farm aid would be a balm to producers who are seeing prices drop and inventories rise because of disputes with China, Canada and other trade partners who are significant purchasers of USA pork, soybeans and other crops.
Few outside his inner circle of economic advisers seemed to agree, with House Speaker Paul Ryan voicing rare disapproval of the president's policy.
"Tariffs are taxes that punish American consumers and producers".
The president said this type of action should have happened years ago, adding, it is "better late than never".
In a written submission before Tuesday's hearing, the US Chamber of Commerce expressed its staunch opposition to tariff escalation, saying it would be US businesses and customers who would foot the bill of the "hidden, regressive taxes".
A crisis of falling prices caused by retaliatory tariffs on American agricultural products prompted the Trump Administration Tuesday to make a $12 billion aid package available for farmers hardest hit by the brewing trade war.
Several countries and regions, including China, the European Union, Canada and Mexico, . have imposed heavier duties on USA imports in retaliation to President Trump's tariff policies. The U.S. and European allies have been at odds over the president's tariffs on steel imports and are meeting as the trade dispute threatens to spread to automobile production.
Trump tweeted on Tuesday that "tariffs are the greatest!" threatening countries that do not bend to his definition of fair trade with further levies. "It's as simple as that".
If Trump imposes a 25 percent tariff on imports of cars, trucks and auto parts, it "risks dragging us all down to a game of tit for tat retaliations that ultimately leave consumers in the U.S.as well as in Europe worse off", said Professor Alexander Mattelaer of the Egmont Institute think tank.
And he noted nations are now coming to Washington to negotiate after having treated the U.S.