Next year’s presidential election will be an important one for farmers.
While the nomination process is still underway on the Democrats’ side, Republicans know who their candidate will be.
Whether the incumbent President Trump can win re-election depends on whether he can pull together the coalition of voters that carried him to the presidency in 2016.
A small but powerful minority, farmers made up an important . About two in three ag producers voted for the President in 2016.
Increasingly, they’re divided about whether they voted for the right candidate.
For farmers, the legacy of Trump’s first term hinges on his handling of trade conflicts with China. The President’s desire to revive industry by protecting it from unfair commercial practices quickly escalated, leading both nations to raise tariffs.
That closed a thriving market for ag exports to American farmers. Soybean cultivators, who are more dependent on foreign markets, were hit particularly hard by the measures.
To compensate farmers for vanishing income, the President set aside reimbursements in two tranches. In 2018, the Department of Agriculture disbursed a package of $12 billion to affected farms. A year later, the subsidies had grown to $14.5 billion.
Whether this compensation was too stingy or overly generous is a matter of sharp debate. Some farmers complained the checks they were cashing weren’t nearly enough to cover their losses.
Some economists disagree, noting that China’s sanctions opened up new markets for the surplus that wasn’t selling in Asia, helping to correct prices and moderate losses. Where the tariffs depressed soybean prices by $0.78 a bushel, the checks covered nearly double that.
What might matter more than the immediate consequences of Trump’s trade policy is the long-term payoff—or at least voters’ intuitions on how it will pan out.
The administration insists China must play by the rules of the international trade game, and that protectionist tariffs are the only way to get Beijing to the bargaining table.
Secretary of Agriculture Sonny Perdue compares the situation to an Olympics competition in which one national team is playing by the rules and another isn’t. Would we tolerate that? Of course not. So why would we allow China to continue flouting international rules like antipiracy legislation, not to mention using its state apparatus to prevent foreign businesses from flourishing and propping up its own national brands?
That analogy explains part of why China’s business conduct is objectionable, but it doesn’t justify favoring a tariff war over other diplomatic strategies.
And it’s here that criticism of the President’s trade gambit has been withering. It’s a lot of disruption to endure for a deal that’s unlikely to satisfy either side. On the other hand, if the gamble defies the odds and results in an advantageous result, Trump will be vindicated against his detractors once again.
What pundits say doesn’t matter as much as what farmers think, though. Most significantly, a recent poll shows Trump’s ag base significantly eroded. Less than half of farmers now say they’ll support his bid for re-election.
Whether that poll will predict how things will turn out in 2020 remains to be seen. If we’ve learned anything from 2016, it’s to take election forecasts with a grain of salt.