Anti-trade talk, tariffs alarm rural Indiana

Trump Country in Indiana is the country, the rural areas that former radio host Mike Pence used to describe as the land of the “amber waves of grain.” In Adams County Donald Trump won with 73.9 percent of the vote in 2016, in Benton County it was 70.6 percent, Clinton County 71.7 percent, DeKalb County 71.7 percent, LaGrange County 74.9 percent, Whitley County 73 percent and Daviess County, a whopping 79.6 percent..

And it was that way across most rural counties without a city of more than 15,000 population. While Mitt Romney won rural Indiana by a two-to-one margin in 2012 against President Obama, Trump won it by a three-to-one margin. Part of that uptick was Gov. Mike Pence on the ticket. The other was a loathing of Hillary Clinton.

Patrick Pfingsten, then with the Corydon Group, noted in a November 2016 column for Hoosier Ag Today that “Trump is no force on agriculture policy. He made a statement in favor of ethanol prior to the Iowa caucus, that he read from a prepared text. He’s also made no mention of how he would approach a Farm Bill, which will likely be negotiated during his term. The most striking thing may truly be his fierce opposition to trade. Agricultural trade is essential for farmers from Indiana and the entire U.S. We simply grow more than we can use, so it has to go somewhere. That’s why so many farm groups work so hard to grow trade markets around the world, and why many were so quick to support the Trans Pacific Partnership.”

And he wrote this gem: “It’s not because of Trump’s deep understanding of agriculture or rural areas. In fact, singing the ‘Green Acres’ theme song during the Emmy Awards in 2005 may be the closest Trump has ever come to a farm.”

The Manhattan billionaire’s draw in 2016 was the economic populism that resonated across rural America, because, as Pfingsten wrote, “Commodity prices are low, inputs are high, jobs are leaving, kids aren’t staying home after college, schools are struggling and infrastructure is crumbling.” Or as Public Opinion Strategies pollster Gene Ulm, who surveyed in 2016 for WTHR and Howey Politics, observed, Hoosier folks were wondering why their grown children were still living in their basements.

Pfingsten made this prescient observation: “Moving forward, farmers and small town residents may be happy with the populist economic message of the new president-elect, but they must speak up to elected officials on important agriculture issues.”

Fast forward to last week when President Trump, described as isolated, raging and “unglued” after his fifth communications director Hope Hicks bolted, abruptly used the steel and aluminum tariffs to lash out at his own West Wing demons who argued mightily against the tariffs. It was so unhinged that most federal agencies who deal with import/export issues had no time to prepare. Top economic adviser Gary Cohn has resigned, and while Vice President Pence, once an ardent free trader, is publicly supportive of the Trump tariffs, Politico reports that he is quietly conveying alarms to President Trump from Hoosier Republicans.

The potential impacts are creating a shudder in Hoosier Trump country. Bob Kraft who headed the Indiana Farm Bureau’s government affairs, wrote in his Howey Politics Indiana column, “Concern that those tariffs may trigger retaliatory tariffs on American products by key international trading partners is generating apprehension throughout Indiana’s agricultural community. In spite of the pride many Hoosier farmers take in our Indiana brand, it doesn’t mean much in the international market for raw bulk commodities such as soybeans and corn which comprise the majority of the state’s agricultural exports.”

There are concerns that Trump’s pulling out of the Trans Pacific Partnership and his threats against NAFTA are exacerbating the anxiety. The American Farm Bureau Federation projected the TPP to increase Indiana annual crop cash receipts and net imports by $196 million and $98.3 million respectively.

Indiana Corn Growers Association President Sarah Delbecq of DeKalb County said if the U.S. pulls out of NAFTA it “would be particularly catastrophic for Indiana corn farmers.” Purdue University has estimated that corn prices would fall as much as 50 cents a bushel a year without NAFTA.

If the alarms bells were ringing conspicuously after Trump pulled the plug on the TPP, giving China an easy route to fill that void, they were in full clang when Reuters reported on Feb. 22 that Mexican imports of Brazilian corn jumped 970 percent — yes, 970 percent — over 2016 in the last quarter of 2017.

“We bought from Brazil for two reasons,” Edmundo Miranda, commercial director of grain merchant Grupo Gramosa, told Reuters. “One, because it was competitive. Two, to see how practical and profitable it was to buy from Brazil or Argentina given the possibility of trade tariffs because of NAFTA renegotiations.”

The reality is that Trump campaigned conspicuously throughout 2015 and 2016 against TPP, NAFTA with many of his speeches filled with anti-free trade rhetoric. Many in rural Indiana readily chanted “build that wall.”

As other nations, many of them U.S. allies, prepare to retaliate on the tariffs, it will be American consumers picking up the tab. The emerging reality is that the wall being built may be around Hoosier exports.

Brian Howey is publisher of the Howey Political Report, a weekly briefing on Indiana politics. Contact him at 317-506-0883 or at howeypolitics.com.

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