Nov 09, 2018 - 11:15am

How Did Trade Play in the Midterms?


Senior Vice President for International Policy

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Soybeans are harvested near Tiskilwa, IL.
Soybeans are harvested near Tiskilwa, IL.

A host of factors contributed to the outcome of the midterm elections, in which Democrats won a House majority and Republicans extended their Senate majority. Health care and immigration were key issues on the minds of many voters, and the strength of the economy was certainly a factor.

What about trade? Americans’ views on trade have been fairly volatile in recent years, with Democrats expressing growing support for trade while Republicans grew more skeptical, though their views too have grown more positive over the past two years with a Republican in the White House.

Most Americans don’t have fixed opinions about trade, as Scott Lincicome argues in a recent paper from the Cato Institute. This fact arguably lends volatility to public opinion on trade.

However, factors that make even a marginal difference in voter enthusiasm or turnout can affect outcomes in competitive races. And trade has certainly assumed a new prominence in 2018’s trade wars, with the Trump Administration imposing new tariffs on about $300 billion of imports and foreign governments responding with retaliatory tariffs on about $150 billion of U.S. exports.

So what do we know?

Exit polls indicate the tariffs were not a winner at the polls. “Just 25% said Trump’s trade policies have helped their local economy, while 31% said they they’ve been hurt and 36% said they’ve seen no impact,” according to MarketWatch.

NBC News reported similar findings: “Thirty-seven percent of voters think Trump’s trade policies have provided no local economic benefit, while 29 percent think trade policies have actually hurt their local economies.”

Consider how the trade war with China has affected exports of soybeans, the top U.S. crop in terms of acres planted. “The latest federal data, through mid-October, shows American soybean sales to China have declined by 94 percent from last year’s harvest,” according to The New York Times. China in recent years had purchased over half of all U.S. soybean production.

Prices are also depressed: “Brandon Hokana, whose family farms 3,500 acres near Ellendale, N.D., estimates that they need a price of $8.75 per bushel of soybeans to break even. Last year at this time, soybeans could be sold for almost $10 per bushel. Now, local elevators are offering prices below $7.” The inflection point downward came at the start of the tariff war with China in early July.

Soybean growers have weighed in loudly and insistently with the administration in opposition to the trade war. Soybean prices are declining as a direct result of this trade feud,” stated John Heisdorffer, an Iowa soybean grower and president of the American Soybean Association (ASA). “We have approached the Trump Administration repeatedly and implored them to hear our side of this story.” And yet the tariffs have been left in place.

How did all of this play in the midterms? U.S. soybean production is centered on Iowa, Illinois, and nearby counties (left, from USDA), rural areas that generally voted for President Trump by wide margins in the 2016 election.

A number of these House districts flipped in the midterms, sending Democrats to Congress, and other districts nearly did so (below right, from CNN). Opposition to the trade war and promises to advocate against tariffs featured in all these campaigns.

More broadly, The Wall Street Journal noted: “Of 19 competitive House of Representatives races in the Midwest and Southeast involving counties with annual soybean production of over two million bushels, 10 went for Republicans and nine for Democrats.” Considering how farm country voters have strongly preferred Republicans in recent years, this is a noteworthy showing for Democrats.

Voters in Iowa’s 1st and 3rd congressional districts and Minnesota’s 2nd district defeated Republican incumbents and sent Democrats to the House in their stead. Other districts in the region came close to doing the same, and Democrats appear to have increased their margin of victory in others.

Was trade a factor in the defeat of Wisconsin’s Scott Walker or the narrowness of the victory of Iowa’s Kim Reynolds, both Republican governors? It seems plausible that the economic turbulence imposed by tariffs – championed by a president of the same party – was a factor for some voters.

Across the Midwest, the sense that trade played a role is made more poignant by the contrast with the 2016 election. In that year, Republicans achieved surprising and even historic gains in the region, setting up a contrast with the midterm results.

It’s important not to overstate the impact tariffs may have had in the midterms. Perhaps the days ahead will shed more information that will support more sophisticated analysis. But the evidence so far suggests tariffs were a drag on Republican candidates in some close races that could not be overcome.

About the Author

About the Author

Senior Vice President for International Policy

Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy.