Tariff fight could hit GOP in key Senate states

Tariff fight could hit GOP in key Senate states
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Democrats see President TrumpDonald John TrumpDeWine tests negative for coronavirus a second time Several GOP lawmakers express concern over Trump executive orders Beirut aftermath poses test for US aid to frustrating ally MORE's escalating trade war with China as an opportunity that could help them win several Senate races in states where a trade fight would damage local economies. 

States that rely on agriculture could be hit particularly hard by retaliatory tariffs from China. That could give Democrats in states like North Dakota, Montana, Indiana, Missouri and Florida — all of which are represented by Senate Democrats up for reelection this year — a new argument to make against the president and his allies in Congress.

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The administration launched the first wave of tariffs last month on steel and aluminum, but tensions rose this week when the White House announced $50 billion in tariffs on a variety of Chinese electronics and other goods.

China responded with a broad list of U.S. goods that would face $50 billion in tariffs as well — a response that prompted a White House threat to add $100 billion in new tariffs to Chinese goods. 

The Chinese tariffs target a smattering of U.S. goods, including soybeans, cotton, corn, pork, chemicals, plastics, cattle, wheat and tobacco. 

China is one of the biggest markets for American export goods, and a top recipient of American agricultural products like soybeans, corn, grains and pork, according to the Office of the United States Trade Representative.

Soybeans and hogs are major sources of revenue in states like Minnesota, Indiana, North Dakota and Missouri. Corn is a major crop in Nebraska, Minnesota and Indiana. And Nebraska, Missouri, Wisconsin, Montana, Minnesota and Florida all feature large cattle industries.

All of those states will see Senate races in 2018, with several Democratic incumbents on the ballot in states Trump won in 2016. Republicans are warning that the economic impact of tariffs could be felt hardest in key Senate states if the trade war continues.

“The economic pain that people will feel from tariffs will be a good reminder of how important free trade is to the economy,” said Alex Conant, a GOP strategist who has served as a top aide to Sen. Marco RubioMarco Antonio RubioPPP application window closes after coronavirus talks deadlock  The Hill's Campaign Report: US officials say Russia, China are looking to sow discord in election US intelligence says Russia seeking to 'denigrate' Biden MORE (R-Fla.). 

“The people most at risk are the people in disproportionately red states who voted for Trump,” he said, adding that the “coincidence of the cycle” is that those states are also home to Democratic incumbents targeted by the GOP.

Democrats are on defense in Missouri, Wisconsin, Indiana, Montana, Florida and North Dakota, where Sens. Claire McCaskillClaire Conner McCaskillDemocratic-linked group runs ads in Kansas GOP Senate primary Trump mocked for low attendance at rally Missouri county issues travel advisory for Lake of the Ozarks after Memorial Day parties MORE (Mo.), Tammy BaldwinTammy Suzanne BaldwinDemocrats try to force Trump to boost medical supplies production Senate Democrats demand answers on migrant child trafficking during pandemic Biden: I'll have a running mate picked next week MORE (Wis.), Joe DonnellyJoseph (Joe) Simon DonnellyEx-Sen. Joe Donnelly endorses Biden Lobbying world 70 former senators propose bipartisan caucus for incumbents MORE (Ind.), Jon TesterJonathan (Jon) TesterThe Hill's Morning Report - Presented by Facebook - At loggerheads, Congress, White House to let jobless payout lapse Overnight Defense: Senate poised to pass defense bill with requirement to change Confederate base names | Key senator backs Germany drawdown | Space Force chooses 'semper supra' as motto Democrats call for expedited hearing for Trump's public lands nominee MORE (Mont.), Bill NelsonClarence (Bill) William Nelson Trump, facing trouble in Florida, goes all in NASA names DC headquarters after agency's first Black female engineer Mary W. Jackson NASA, SpaceX and the private-public partnership that caused the flight of the Crew Dragon MORE (Fla.) and Heidi HeitkampMary (Heidi) Kathryn Heitkamp70 former senators propose bipartisan caucus for incumbents Susan Collins set to play pivotal role in impeachment drama Pro-trade group launches media buy as Trump and Democrats near deal on new NAFTA MORE (N.D.) are all running in states won by Trump. 

Minnesota Democratic Sens. Amy KlobucharAmy KlobucharSenate Democrats demand answers on migrant child trafficking during pandemic Senate Democrats push to include free phone calls for incarcerated people in next relief package Lobbying world MORE and Tina SmithTina Flint SmithSenate Democrats demand answers on migrant child trafficking during pandemic Cook Political Report shifts several Senate races toward Democrats On The Money: GOP mulls short-term unemployment extension | White House, Senate GOP strike deal on B for coronavirus testing MORE are running for reelection too, although their seats are considered more secure for Democrats after Hillary ClintonHillary Diane Rodham ClintonBlumenthal calls for declassification of materials detailing Russian threat to US elections Hillary Clinton roasts NYT's Maureen Dowd over column Hillary Clinton touts student suspended over crowded hallway photo: 'John Lewis would be proud' MORE won Minnesota in 2016. And Nebraska Republican Sen. Deb FischerDebra (Deb) Strobel FischerCongress botched the CFPB's leadership — here's how to fix it White House, Senate GOP clash over testing funds Prioritizing access to care: Keeping telehealth options for all Americans MORE is also not seen as in serious danger in her red state.

Many of the top soybean-producing states depend on exports to China. North Dakota, for example, sends two-thirds of its soybean production to China. Tariffs on those imports could raise prices, prompting Chinese buyers to choose soybeans from other markets.

“If you’re a soybean farmer, you’ve got to be nervous about this,” said Mark Zandi, the chief economist at Moody’s Analytics. 

The Chinese trade war also puts a strain on Montana, a top producer of wheat. From 2016 to 2017, China was the third-largest purchaser of hard red spring wheat. According to the Montana Grain Growers Association, Montana sold 7 million metric tons of that crop to China last year.

Trade and business associations in these rural states are sounding the alarm, warning that tariffs imposed by China could hurt key industries and have a negative impact on state economies.

That puts Republicans running for Senate in a tight spot as they grapple with whether to stick with Trump on tariffs or break with the president in favor of their respective states’ industries. 

“Owning Trump’s position means owning any potential trade war,” a Democratic strategist working on a top Midwestern Senate race told The Hill

That tension is already apparent in the North Dakota Senate race, where Heitkamp is running against Republican Rep. Kevin CramerKevin John CramerThe Hill's Coronavirus Report: iBIO Chairman and CEO Thomas Isett says developing a safe vaccine is paramount; US surpasses 150,000 coronavirus deaths with roughy one death per minute McConnell tees up showdown on unemployment benefits Senate panel scraps confirmation hearing for controversial Pentagon nominee at last minute MORE.

Cramer addressed the tariffs in a tweet on Wednesday, calling for a “more measured approach” and criticizing the “impulse” that “created unnecessary turmoil.”

But Democrats pounced on that statement, pointing to the text of an earlier, later deleted tweet, where Cramer took a stronger tone by declaring his “opposition to tariffs that have the potential to harm North Dakota’s [agricultural market].”

Democrats running in competitive House races are starting to put pressure on vulnerable Republicans there, too. 

Former Rep. Brad AshfordJohn (Brad) Bradley AshfordHouse Democrats target Midwestern GOP seats Tight race brewing in Nebraska House contest: internal poll Nebraska Democrat Kara Eastman wins House primary to take on Don Bacon MORE (D-Neb.), who’s mounting a comeback for his Omaha-based seat, seized on the clash to link his opponent — GOP Rep. Don Bacon — to Trump’s trade war. In a tweet on Wednesday, he called on the agriculture sector to “express your opposition to Trump’s trade wars” by voting against Bacon.

Bacon answered on Friday with a statement that asked the White House to “find a solution to this tariff war with China” that both protects American intellectual property from China — a stated goal of Trump’s tariffs — while also allowing “Nebraska’s export agriculture economy of $6.4 billion to remain competitive and flourish.”

The White House has sought to downplay any political concerns related to the tariffs, pointing to the growing economy.

Top Trump economic adviser Larry Kudlow told reporters Friday that the administration’s “political success will rise and fall with the economy.”

“The economy is doing rather well now and I expect it to do even better, so I don’t necessarily with [agree] all the pundits about how bad the midterms are going to be for the GOP,” he said. 

“I’m not a tariff guy, but sometimes you need to use tariffs to bring people to their senses.”

Industry leaders are trying to convince the White House to scale back those tariffs, and Kudlow admitted that it’s “possible” Trump is using the tariff proposal as a negotiating tactic. Those leaders are encouraged by recent exemptions granted from steel tariffs.  

But Conant expressed the concerns of many Republicans who worry the market instability and potential adverse effects of the tariffs could muddle the GOP’s economic message in the fall. Before the tariff fight, Republicans had hoped that an economic boom following the GOP tax cuts would help blunt Democratic enthusiasm.

“If trade wars were good for the economy, we’d have them all the time,” he said.

“Democrats want the midterms to be about Trump’s behavior. Republicans want them to be about the economy and economic policies. If the economy goes south, Republicans have nothing to run on.”

Vicki Needham and Sylvan Lane contributed.