Randy Richards considers himself an optimist. After all, the farmer lives near the town of Hope in eastern North Dakota.
But a flurry of trade news in recent months has Richards worried. It reached a crescendo last week, when China imposed retaliatory tariffs on a range of U.S. products, including 25 percent on soybeans, one of the crops Richards grows.
On the other end, the cost of equipment is going up because of previous tariffs President Donald Trump’s administration imposed on steel and aluminum imports, he said. And amid those fights, the Trump administration is renegotiating the 24-year-old trade agreement linking the U.S. with Canada and Mexico.
“I’ve been doing this for 46 years,” said Richards, the Steele County president for the North Dakota Farmers Union. “Right now, I am the most scared I’ve ever been as to where the future of farming is going.”
The escalating trade battles have animated the hotly contested U.S. Senate race pitting Democratic incumbent Sen. Heidi Heitkamp against Republican Rep. Kevin Cramer. North Dakota is one 10 states that Trump won where a Senate Democrat is running for re-election, but the state also relies heavily on its agricultural industry and exports to other nations.
Heitkamp this week described the trade war as “misguided” and called for rallying U.S. partners to confront China rather than using a “blunt instrument” like tariffs. Cramer, a Trump ally who previously denounced Democratic “hysteria” over Chinese tariffs, said he’s “on board with what (Trump) is trying to do” but expressed distaste for tariffs.
It remains to be seen how the turmoil affects the race’s outcome.
“Cramer boasts about (how) he votes with the president all the time. I don’t think that’s good for North Dakota,” said Richards, who said he didn’t vote for Trump in 2016.
For his part, Cramer argued Trump’s policies have benefited farmers in other areas, pointing to tax cuts, regulatory relief and the elimination of the Affordable Care Act’s individual mandate. He said Commerce Secretary Wilbur Ross has committed to coming to North Dakota to talk to farmers.
“We don’t stop fighting for America first every other year because it’s an election year,” Cramer said. “It just means you have to be out there talking about it.”
Cramer said Trump’s trade message is “resonating,” while leaders of some farm organizations expressed some patience with the administration.
“A lot of people are really trying to knock on the president’s door,” said Jeff Mertz, president of the North Dakota Grain Growers Association. “For my bottom line, I wish the tariff thing wouldn’t have happened, but in the end I feel that hopefully the short-term hurt will be outweighed by the long-term gain.”
‘Looking at losses’
Soybeans have become the poster child for the trade war with China, given that the Asian nation is the biggest market for the U.S. North Dakota Dakota Trade Office Executive Director Simon Wilson estimated the state exports $1.4 billion to $1.8 billion worth of soybeans to China annually.
But a U.S. Department of Agriculture report released this week lowered soybean export projections for 2018-19. Monte Peterson, a Valley City area farmer who’s a leader in state and national soybean groups, pointed to soybean futures that have dropped steadily in recent weeks.
“This price that we’re at today … we’re below any potential for profit,” he said. “We’re looking at losses.”
North Dakota Soybean Growers Association Executive Director Nancy Johnson said they typically don’t sell “a large number of soybeans” this time of the year. But Peterson said the trade situation is “getting more serious every day that goes on.”
Pete Hannebutt, the North Dakota Farm Bureau’s public policy director, identified several issues with the current structure of international trade, such as China’s “pretty shameless” theft of intellectual property and Canada’s “extremely hurtful” treatment of U.S. dairy producers. He said Trump is willing to take a “hard line.”
“Many farmers are willing to give the Trump administration at least several months worth of slack on this,” Hannebutt said. “I think the optimism for a good deal will last into the fall, and obviously the administration has to think about the politics of it for this fall’s elections.”
The situation is obviously on the minds of North Dakota’s U.S. Senate candidates.
Both Heitkamp and Cramer have met with U.S. Trade Representative Robert Lighthizer in recent days and have expressed hope for a quick resolution to the trade spats.
Heitkamp has signed on to legislation to nullify the steel and aluminum tariffs and to require congressional approval for tariffs imposed in the name of national security. She hoped a non-binding Senate vote this week would send a message to Trump’s administration that “patience is running thin.”
Cramer, meanwhile, called for the Trump administration to unveil a “safety net plan” for farmers who are hit by lowered commodity prices.