Will Trump Crash the Farm Economy?

Or, for that matter, much concern about the administration scandals about wife beaters, Saudi princes, Ben Carson’s table or Scott Pruitt’s soundproof room. Many people don’t even know these scandals exist — they generally don’t lead in Sean Hannity’s or Tucker Carlson’s world.
Sure, there is a little rumbling about the increased deficit, but not much. Besides, it’s the fault of Congress, in particular the Democrats.
But people here — Republicans and Democrats alike — are paying great attention to what President Trump is doing economically, especially since he started in on tariffs. We have a strong manufacturing base in our county; when tariffs on aluminum and steel were announced, local manufacturing leaders tried to be diplomatic, praising the Trump tax cuts but saying the steel and aluminum tariffs would hurt their businesses by driving costs up.
One smaller manufacturer — a Trump voter — told me that his costs to produce his product nearly doubled overnight, and that his business has already been hurt by the tariffs. Prices didn’t rise only after the tariffs were announced; they started rising when Mr. Trump floated the idea.
But it’s the farm economy that rural Iowans are paying particular attention to. When the president first proposed a 20 percent import tax on Mexico to pay for his wall, Iowans objected: Mexico is our second-largest export partner after Canada.
Mr. Trump has waffled on the renewable fuel standard before — ethanol is big around here — and Iowa’s entire congressional delegation and the governor’s office pressured him to renew it. We know he will waffle again, and potentially end it.
Most recently, when Mr. Trump imposed $60 billion in tariffs and sanctions against China, the Iowa Soybean Association said his action “poses an immediate and grave threat to their industry and Iowa agriculture.”
Senator Joni Ernst and Iowa’s agriculture secretary, Mike Naig, both say the tariffs will hurt Iowans, and Mr. Naig says we need to expand markets, not shrink them. Senator Chuck Grassley said something similar, on Fox News: “Tariffs do not put America first — low barriers and expanded access do.”
China has already responded with its own tariff on pork, which will have a dire impact on Iowa. Iowa is the nation’s largest pork producer, producing three times as much pork as the next-highest state.
A couple of banker friends who work with farmers every day told me last week that with commodity prices down and the tariffs imposed, approximately 10 percent of our farmers probably won’t make it this year, and 10 percent more will likely fail next year. They also shared the news that in Iowa, larger agribusinesses are buying up smaller farms that are in financial trouble, and that people are starting to make comparisons to the farm crisis of the 1980s, when approximately 10,000 Iowa farmers lost their farms.
Even Representative Steve King, the avid Trump supporter and Iowan every liberal loves to hate, is worried about a new farm crisis.
Dairy farmers are particularly hard hit, suffering through four years of declining prices. It’s gotten so bad, dairy farming organizations are giving out suicide hotline numbers, as farmers are committing suicide in the hope that their insurance will save the family farm.
I’m focusing on the area I know, rural Iowa, but if the president stays on course with the tariffs, the impacts will hit many rural areas all over America, what I call Trumplandia.
“It gives Democrats a generational opportunity to do the political work with farmers they haven’t done since the 1980s farm crisis,” said Matt Russell, a rural sociologist and farmer in Iowa. “Democrats do farm policy really well but are terrible at farm politics. Republicans do farm politics really well but have a history of doing terrible farm policy.”
Harvest will be coming in when members of Congress, in recess, return to Iowa to campaign. They will be getting earfuls from rural constituents about the economic impacts of Mr. Trump’s tariffs.
The president’s position is actually quite precarious. He’s already at a historic low approval rating. With the multiple scandals, rampant corruption and the Mueller investigation, the only thing keeping him near 40 percent approval — and most important, approval among most Republicans — is a strong economy. That, and Fox cheerleading. But if he tanks the rural economy, he and his legacy are in deep trouble.
Furthermore, if the rural economy turns sour, much of rural America will abandon Mr. Trump, and Fox may have no choice but to follow.
Then it’s just a matter of time before they will turn with the hope that a Trump impeachment and a Pence presidency will save the economy, the conservative gains that have been made under Trump, and the Republican Party. They’ll believe that they have no choice, and it will be swift and ruthless.
Robert Leonard is the news director for the radio stations KNIA and KRLS.
By: Robert Leonard
Source: The New York Times
Link: https://www.nytimes.com/2018/04/01/opinion/trump-tariffs-agriculture-economy.html