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Trade war threatens the GOP's firewall in 2018

Ben Sasse, the Republican senator from Nebraska, covered only half the risk last week when he said President Donald Trump's escalating trade conflict with China threatened "to light American agriculture on fire."

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Analysis by Ronald Brownstein (CNN)
(CNN) — Ben Sasse, the Republican senator from Nebraska, covered only half the risk last week when he said President Donald Trump's escalating trade conflict with China threatened "to light American agriculture on fire."

Trump's mounting confrontation with China also threatens to light a bonfire directly beneath the Republican Party's last firewall against potentially significant losses in the 2018 midterm elections.

The GOP's dominance of small-town and rural America has become the indisputable geographic foundation of its power in Washington. And the party is counting on continued strength in those areas to contain its losses this fall, particularly after the repeated indications in a number of special and local elections over the past 15 months that distaste for Trump in urban centers and white-collar suburbs could produce a sharp backlash against Republican candidates in more densely populated areas.

In this volatile dispute, the stakes in rural America are high both economically and politically. No industry is more identified with the American heartland than agriculture, yet few are more tightly integrated into global markets.

Tariffs would hit farming communities harder

Tough talk against China was a big part of Trump's campaign pitch, but the prospect of an actual trade war with China could weaken that last line of defense for the GOP. No economic sector has raised greater alarms about the potential consequences of a trade war than agriculture, a highly export-dependent industry mired in a years-long slump even as most other economic sectors have revived. That's sent farm state Republican elected officials and strategists scrambling to criticize the rapidly multiplying threats by Trump to impose punishing tariffs on a wide array of Chinese products -- and the Chinese threats to respond in kind, particularly against US agricultural exports.

"For the rural economy in Iowa the forecast is grim, and I think Trump needs to understand what's going on the ground out there," says Craig Robinson, a longtime GOP strategist in Iowa. "These people in rural Iowa are already seeing their towns, their people and their population disappear. It is all consolidating in these metropolitan areas. If these tariffs actually happen, it is going to speed that up, and you risk speeding up that change where these are rock solid conservative voters today and in the next election cycle it could be completely different."

Democrats believe the threatened tariffs are creating new opportunities for them in rural places that have become very stony ground for the party. "He is making a very, very big mistake by doing this," says Rep. Cheri Bustos, an Illinois Democrat who leads the party's rural engagement effort for 2018. "Many of the farmers I know, the growers and the producers, they were not only just supportive of President Trump but they were enthusiastically supportive of him. It's one more indication that he's treating us like flyover country. When you are messing with someone's pocketbook at a time when they are already hurting, that does not bode well."

Agricultural exports now consistently account for about 20% of farm income. That's considerably higher than exports' share of the total economy, which has varied from about 11% to just below 14% over the past decade.

China in 2017 passed Canada (which is locked in trade disputes with Trump over renegotiating the North American Free Trade Agreement) as the largest market for American agricultural exports. And soybeans, which China conspicuously targeted for retaliatory tariffs, this year will surpass corn as the crop that American farmers are planting on the most acres -- the first time it has exceeded corn in at least 35 years, according to the US Department of Agriculture. Soybeans and corn rank one-two as the most highly exported American crops; China has tagged both, along with wheat, beef and pork, as targets for offsetting tariffs if Trump implements his threatened levies on a wide array of Chinese imports.

Adding to the pressure, the trade tensions are rising when many farmers are already scuffling. Though the recovery in energy production (particularly natural gas) boosted overall job growth in 2017 across small town and rural communities, agriculture itself has been suffering through a cycle of excessive production and weak prices: The Agriculture Department's Economic Research Service recently projected that farm income this year would slump to its lowest since 2006. Ironically, even as Trump is threatening China, one of Agriculture Secretary Sonny Perdue's principal responses to the squeeze has been to pledge to increase American agricultural exports.

Republicans' rural base

All of this pressure is concentrating on exurban, small town and rural communities that have become central to Republican electoral power. As Tom Davis, a former Republican representative from Virginia and chair of the National Republican Congressional Committee, often says, the GOP's center of gravity "has moved from the country club to the country."

The extent of the shift is captured in data analyzed by Bill Bishop, the author of a highly regarded book on geographic and political polarization ("The Big Sort") and co-founder of The Daily Yonder, a nonprofit website that examines rural issues.

At the presidential level, the Daily Yonder's analysis ranks counties across seven categories based on their size, from counties of 1 million or more people that are in urban centers down to rural areas. Democrats have won the largest category, of million-plus urban centers, in every presidential election since 2004, and also carried the next two groupings (million-plus counties not located in central cities and metro counties with 250,000 to 1 million in population) in 2008, 2012 and 2016.

Republicans, in turn, have established a commanding advantage on the smallest four groups of counties on the list, including metropolitan areas that range from 250,000 to 1 million in population. Small town America is centered on the bottom three groups: metro areas with less than 250,000 in population, rural counties adjacent to metropolitan areas and rural counties not near any metro areas. Republicans have carried each of those areas comfortably since 2004, but in 2016 Trump still dramatically expanded the party's advantage in those places. He beat Hillary Clinton by almost exactly 2-to-1 in each of the two smallest areas.

In the House, the GOP hold on small town America is even more overwhelming. The Daily Yonder ranks each House seat based on the share of the population that lives in rural areas (according to census definitions). By its count, Republicans now control 44 of the 50 most rural House seats across the country, and fully 107 of the top 120 -- a stunning ratio of nearly 9-to-1. Even looking at all 181 districts where one-fifth or more of the residents qualify as rural, Republicans hold 155 seats and Democrats just 26 (including Bustos' seat). That means almost 2-in-3 House Republicans represent seats that are at least one-fifth rural, compared with only about 1-in-8 Democrats.

The fight for rural voters

Democrats are targeting very few of the Republican-held seats at the top of that list, generally the places where the rural population reaches at least 45% of the total. (Republican Reps. Bruce Poliquin of Maine, John Faso of New York and Tim Walberg of Michigan are among the few exceptions.)

But the Democrats are aiming at a large number of GOP representatives one rung down the ladder, in districts that mix a substantial rural population (around 15% to 40% of the district) with larger population centers, particularly white-collar suburbs. Republicans in that category range from Andy Barr in Kentucky to Rod Blum and David Young in Iowa; Rodney Davis and Mike Bost in Illinois; Jeff Denham and David Valadao in California; and Cathy McMorris Rodgers and the open seat being vacated by Dave Reichert in Washington state.

Relative to his 2016 vote, Trump's approval in rural America has declined, just as it has in bigger places. But the President's culturally conservative and anti-immigrant themes generally find a receptive audience in those communities, and the most recent NBC/Wall Street Journal poll placed his approval rating in rural communities at 51%, 7 points higher than in suburban areas and 13 points higher than in urban centers.

Trump's relatively stronger standing has fortified Republican hopes of preventing any Democratic rural revival in 2018. But the trade dispute has complicated that picture. While the President's hard line against China could prove popular in small towns that revolve around manufacturing, it has drawn near universal condemnation from the leading farm groups. "It is the worst kind of news we could get," John Heisdorffer, an Iowa farmer and president of the American Soybean Association, told the Des Moines Register last week.

Responding to those alarms, a parade of farm state Republican senators and representatives have criticized the proposed tariffs and urged the administration to find other ways to pressure China. But, apart from Sasse, few have personally criticized or distanced themselves from Trump.

Republican Rep. David Young of Iowa, who could face a competitive race this fall, walked that tightrope in an appearance on National Public Radio last week. "I think the President has the best interests of America in mind when it comes to the economy and making sure that farmers and anybody else has great opportunity out there," Young said. "It's just so unfortunate that when it comes to the trade issue, and it's not fair, whatever the issue is first -- steel, intellectual property, aluminum -- that those foreign countries, China, know where to hit us first, and that's with agriculture."

Most important, Trump's farm state Republican critics have yet to propose any concrete action Congress might take to discourage him from pursuing sanctions if talks with China stalemate; Young's staff, for instance, says only that he "isn't ruling out any action available to Congress." The administration has signaled it may use other federal programs to financially compensate farmers hurt by any eventual tariffs -- though the magnitude of the potential losses would be difficult to entirely offset.

In rural America, the cultural barriers for Democrats remain formidable. But the Republican reluctance to confront Trump too forcefully could create a rare opening in farm country for Democrats who are generally challenging Trump much more directly than their GOP counterparts over the tariffs. North Carolina Democrats, for instance, held a press conference Monday to denounce Trump's saber rattling as a threat to the state's farmers.

"If the Republican members of Congress don't start ... standing up to this President, I think that November is going to be a very positive election for Democrats," Bustos says. "Republicans definitely have to own what the Trump administration does. [As the majority] it is on them to allow us to debate these issues. It is on them to make sure we have reasonable legislation we can vote on. It is on all of their backs."

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