While Trade War Looms, Iowa Republicans Cower
DES MOINES, IA.-On Saturday last, the Republican and Democratic Parties of the state of Iowa met at the same time in this same city in different venues. The Democrats met in an event space downtown and the GOP met in the exhibition hall on the state fairgrounds. This latter was something of a staffing error in that it was 97 degrees outside and the exhibition hall had a glass roof. However, doing business inside a large crockpot did tend to accelerate matters considerably.
Both parties met in the shadow of a story in Friday’s Des Moines Register that put a price on the damage being done to Iowa’s farmers by the president*’s ill-conceived blurt of a trade war with China. In retaliation, China slapped a retaliatory tariff on soybeans. One-third of Iowa’s soybean crop, valued at $14 billion, annually goes to China, so this one slammed the state’s farming communities in dozens of different ways. (Iowa, it should be recalled, went for the president* by 10 points in 2016.) From the Register story:
Soybeans are among hundreds of U.S. products China has singled out for tariffs. The U.S. has an equally long list that includes taxing X-ray machines and other Chinese goods. Iowa farmers could lose up to $624 million, depending on how long the tariffs are in place and the speed producers can find new markets for their soybeans, said Chad Hart, an Iowa State University economist. U.S. soybean prices have fallen about 12 percent since March, when the U.S.-China trade dispute began.
Grant Kimberley, director of market development at the Iowa Soybean Association, said farmers are holding out hope that trade disputes are resolved before the July deadline - or are short-lived if they go into place. Like others, Kimberley, who farms with his family in Polk County, believes China is as reluctant as the U.S. to lose soybean trade. China, with a population of more than 1.4 billion, imports 62 percent of the world's soybean production. About 40 percent of China’s soybean imports come from the U.S. Tariffs could slash U.S. soybean exports to China by about 65 percent, as other countries' soybeans become a better buy, a Purdue University study said. It shows losses for U.S. farmers could range from $1.7 billion to $3.3 billion with tariffs up to 30 percent. "You can't make business decisions with this kind of uncertainty. … it will be difficult not just for farmers, but ag lenders, equipment manufacturers, seed companies," Kimberley said. "It impacts everybody." Reduced China demand and lower prices for soybeans will help drive increased demand from other global markets, Hart said. "The product that used to go to China will go to Europe, will go to North Africa, as we find those other markets," he said. But, Kimberley said, "nothing can replace China."
These were some stunning numbers, and dozens of farmers at both conventions were talking about them. The numbers – and the new tariffs that were the basis for them-put a particular edge on one particular election this fall. Since 1972, Iowa has been one of 12 states that elects its Secretary of Agriculture-or, technically, the head of the Iowa Department of Agriculture and Land Stewardship-and the president* got his chubby little fingers on trade policy, the state’s farmers were already staggering, and many were talking openly of the possibility that more new retaliatory tariffs from, say, China or Mexico would send the state’s farming community into a spiral similar to what happened in the 1980’s, when farmers sank into the worst economy they’d seen since the Great Depression, an economic shock that rearranged farm communities forever.
In the roasting pan of the exhibition center, five candidates, all men, presented themselves for nomination to run for Agriculture secretary. One of them was Mike Naig, the incumbent. Another one was a man named Ray Gaesser, who once was the head of the American Soybean Association and who works as a consultant on farm and trade issues for the administration. In June, Naig won the Republican primary, but he garnered only 34.6 of the vote in the five-way field, just short of the 35 percent he needed to claim the nomination outright. Which brought us into the exhibition hall and five of the strangest campaign speeches I’ve ever heard. They were not strange in that they were somehow weird; they were strange because they were almost entirely detached from the very real issues that will confront whoever wins the election to be Agriculture Secretary in the fall.
All five men – Naig and Gaesser, along with Craig Lang, Chad Ingles, and Dan Zumbach-spoke of their lifelong love of the land and their experience growing up on farms of varying sizes. They all also spoke of their deep religious faith, their devotion to the anti-abortion cause, their dedication to school choice, and their unshakable support of the Second Amendment. These are all hyper-conservative litmus tests, so it was no surprise to hear the five candidates mouthing them from the podium. They all mentioned babies in the womb. They also all mentioned the right to bear arms. Not one of them said the word, “tariff.”
Clear as day, there was one of the essential conundrums of our politics. A huge amount of work has been done on exactly why voters in places like Iowa vote against their own economic interests, and do so with such conspicuous glee. And here it was. The Secretary of Agriculture and Land Stewardship of Iowa doesn’t have anything to do with abortion or gun control, unless somebody finds a way to plant a crop of newborns or raise a stand of AK’s. But, certainly, the guy in that office has to be on the cutting edge of lobbying for his state’s farmers against the angry whims of a disjointed presidency*, and at the forefront of mitigating the effects on his state’s farmers of those policies. But nobody said a mumbling word all afternoon about tariffs that could cost Iowa’s farmers $624 million. The disconnect was sharp and obvious.
Naig won the convention’s endorsement, edging Gaesser on the fourth ballot, despite the fact that all three of the other candidates tossed their support to the latter as they dropped out. I buttonholed both of them after the balloting and asked them about running as a Republican, with this Republican president, for this particular office. Both Naig and Gaesser answered in a fashion not dissimilar to the attempts of a deer to cross a busy interstate.
“We’re all concerned about tariffs,” said Gaesser. “I am an adviser to President Trump, and I’ve shared with him the impact of tariffs on people here. In general, our Republican farmers support the president and I support the president. He just needs to know how it’s going to affect us in agriculture.
“I would say [to Iowa farmers] that he’s been a negotiator his whole life. We knew what we were getting when we elected President Trump and it’s his model of negotiations and we needed to be prepared for that model. Something needed to be done. We have issues on trade that need to be balanced. We need trade but we need fair trade. Some of our customers aren’t treating us fairly and we need to work on that. I believe they will get solved, but it may take a little time. I don’t know.”
For his part, Naig was a bit more elaborate in the way he managed to make his chicken salad out of that which you are not supposed to be able to make chicken salad.
“The message we’ve been sending to the Trump Administration, and this is what I’ve been hearing when I travel the state, folks appreciate the fact that we’re attempting to do something about trade, disruptions in trade, non-tariff trade barriers that have been a problem,” Naig said. “Intellectual property, biotech trade approvals, beef and poultry and things like that, particularly in China, that we know need to be dealt with.
“I think there’s an understanding and appreciation of that. But, at the same time, our message to the administration, in addition to saying, yes, we appreciate your efforts to resolve these things, you’ve got to do it in a way that prevents these retaliatory tariffs from coming into effect. We urge a timely negotiation to resolve these problems. One-third of Iowa soybeans go to China and it took years to build that market, and it’s a good, solid market. But, as I stated before, we need to address some of these issues, because we need free and fair trade, but we need to hold our trading partners accountable.”
Earlier that afternoon, at the Democratic convention, Tim Gannon seemed a bit more at ease. He is his party’s candidate for Agriculture Secretary. In the 1980’s, Gannon saw the deep farm crisis ripple through the town of Colfax, where his father ran a John Deere dealership. “The ripple effect in a small farming town is that you’ll have some farmers go out of business, and some who will cut back on expenses, so they may not expand their operation, so they’re not going to hire somebody to build a new building.
“The example I give when I talk is that my Dad owned the John Deere store and so, growing up, during the farm crisis in the ‘80’s, during the farm crisis, when he wasn’t selling tractors and the folks who worked in the John Deere plants in Iowa weren’t building them. If we have that situation again, where farmers aren’t buying new equipment, it’s going to be tough on those implement dealers and the people they employ, and tough on the people who work in the factories.”
And now, there is the trade war, and the tariffs, and a fight that echoes back to the previous Gilded Age, when tariffs and an unstable economy socked farmers all over the Midwest and gave rise to the Grange, a farm protest movement and, ultimately, to prairie fire populism. “It’s worst case scenario that seems to be playing out. I think a lot of people hoped we’d tip-toe up to this point and then back away, come to some sort of agreement,” Gannon said. “The problem has been that I don’t think the administration has a plan. You have the Secretary of the Treasury on Sunday saying that there’s not going to be a trade war, and that they’ve got things worked out.
“A couple days later, somebody from the White House says that was a misstatement and the trade war’s back on. Ag groups have been trying to make the case that this is unwanted news. We have not been successful in telling the administration why this is a bad idea for rural America.”
What happened on the farms in the late 19th Century happened because, for good or ill, people connected macro-politics with what was going on in their own lives. That is a talent we’ve lost in our politics in the ever-denser thickets of the age of mass media. And, with it, like strangers on a dark county road, we’ve lost ourselves with it.
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