OOPS! Trump’s Trade War Hammering Farmers, Factory Workers In Crucial Wisconsin
huffpost.com
The state could be key to his reelection, but the tariff wars are devastating key voting blocs.
By S.V. Date
S.V. DATE/HUFFPOSTWill Hughes looks over 400 acres of organic soybeans at his family’s farm in Janesville, Wisconsin. The farm has lost about $500,000 in income because of President Donald Trump’s trade war with China.
EAST TROY, Wis. – Farm Aid musicians who over three-and-a-half decades have helped farmers cope with torrential floods, withering droughts and epidemics of bank foreclosures this year added a new calamity to their list: President Donald Trump’s trade war.
“With devastating weather, low prices and harmful farm and trade policies, America’s family farmers are facing immense challenges to hold onto their farms,” Farm Aid founder Willie Nelson said prior to his appearance her Saturday at the 2019 benefit concert. “It’s not right.”
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Wisconsin has become ground zero for Trump’s tariff battles with an assortment of foreign foes ? battles that come following years of depressed milk prices that have driven dairy farmers out of business and a spring of drenching floods.
“It’s really salt on the wound,” said Alicia Harvie, Farm Aid’s advocacy and farm services director. “It’s happening at the worst possible time for farmers.”
In Wisconsin, though, they are not the trade war’s only victims. From Harley-Davidson factory workers worrying about their jobs as their company’s profits tanks, to a weather equipment maker forced to pay hefty import taxes, to a kidney beans processor facing retaliatory tariffs in Europe, a wide swath of voters are losing money and, in some cases, their livelihoods in a state that could determine Trump’s fate next November.
“I can’t imagine it isn’t going to hurt him,” said Randy Jasper, who with his son grows soybeans, one of the crops hardest hit when China closed its market to many U.S. agricultural products last year to retaliate against Trump’s import duties on Chinese goods.
Jasper added that Trump will not get away with downplaying the economic damage or claiming that his $28 billion-and-counting in bailouts have made everything better. Farmers and their families and friends understand full well what’s happening, he said. “Everybody knows. It’s out there in the real world.”
Tim Corkum, who owns an art gallery in the downtown strip of Menomonee Falls just blocks from the Harley-Davidson factory, said that even in his deeply Republican town ? “You can’t make this place any redder if you opened up an aorta and sprayed it all over” ? he’s hearing from people tired of Trump.
“It’s becoming clearer to them that putting a failed real estate tycoon in charge of the international economy wasn’t such a great idea,” he said.
The White House did not respond to numerous HuffPost queries about the trade war’s effects on Wisconsin.
Trump clearly continues to have his strong devotees, particularly among those who have not been personally affected by the tariffs. These supporters say they cannot think of any circumstance that would force them to reconsider their votes.
But even some of those loyal followers acknowledge that Trump could indeed lose critical support if the tariff battles end badly for him or, worse, don’t end at all.
“I think the tariffs are a tricky line to walk,” said Mark Baldwin, who works at a graphics packaging firm that neighbors the Harley plant. “If they bring about better trade, it will work for Trump. If they don’t, well, it could cost him some votes.”
For Trump, losing even a small fraction of the votes he won in 2016 could mean losing Wisconsin ? and a second term.
A key state in 2016, and again in 2020
Trump and his political advisers have been acutely aware of Wisconsin’s role in putting him in the Oval Office. It, along with Pennsylvania and Michigan, had not voted Republican in decades. Democrat Hillary Clinton’s campaign had assumed Wisconsin voters would support her and did not bother bringing her there ? a point that both Trump and his aides frequently make.
Yet Trump’s combined victory margin in those three states was just 77,744 votes. In Wisconsin, it was 22,748 votes, or 0.8 percent, and post-election analyses showed it largely resulted from a dramatic drop-off of support for Clinton compared to former President Barack Obama’s showing in 2012. Trump actually won fewer votes in Wisconsin than Obama’s opponent in the election, Republican Mitt Romney.
As Trump has ramped up his reelection campaign, his strategy, both in his message as well as his path to 270 electoral votes, has been to replicate his victory of three years ago. While his aides talk about picking up some states that voted for Clinton in 2016 ? such as Minnesota, New Hampshire and, improbably, New Mexico ? Trump’s deep and growing unpopularity among college-educated voters, particularly college-educated women, has made an exact repeat of 2016 his most likely path to a second term.
And even that strategy is revealing cracks. In each of the key Midwestern states, Democrats made strong gains in the 2018 midterms, and Trump’s approval rating is well below 50 percent in all three. In Pennsylvania and Michigan, in addition to winning both governor’s races and U.S. Senate races by blowout margins, Democrats flipped five U.S. House seats across the two states.
The strength of those Democratic victories, combined with automotive industry job losses in Michigan, raises the possibility that Trump could lose both of those states in 2020 ? thereby raising the stakes even further for Wisconsin.
If Trump loses Pennsylvania and Michigan but carries all the other states he won in 2016, Wisconsin’s 10 electoral votes would still give him exactly the 270 he needs for a second presidential term.
“The path to the White House runs through America’s Dairyland, and we aren’t taking that for granted,” said Guy Cecil, chairman of Priorities USA, a political group that supports Democratic candidates. “Wisconsin is one of the most likely states to decide this election and Priorities is fully committed to defeating Trump in the state,” Cecil said.
For Trump and his White House, the state has been a top priority from almost the day he took office.
Courting, then Twitter-fighting Harley
Barely two weeks after his inauguration, Trump donned his overcoat and walked along the South Lawn driveway inspecting a line of parked motorcycles. They were Harley-Davidsons, a brand Trump associates with the bikers who support him in addition to being a major manufacturer in Wisconsin.
In a Roosevelt Room photo opportunity a little later, Trump told company executives and union officials that his “America First” policies would help companies like Harley create new jobs for U.S. workers. “Thank you, Harley-Davidson, for building things in America,” he said. “And I think you’re going to even expand.”
A year-and-a-half later, the exact opposite had happened.
When Trump imposed tariffs on imported steel and aluminum in early 2018, the European Union responded by jacking up tariffs on imported U.S. motorcycles. Harley-Davidson’s European market evaporated. To bring it back, the company decided to make its bikes for Europe in Thailand, thereby avoiding the EU tariffs. Management also shuttered the company’s plant in Kansas City and passed out pink slips to its 800 workers there.
Trump reacted with fury, tweeting angrily at company executives just 18 months after welcoming them to the White House. “Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas,” Trump wrote on Aug. 12, 2018. “Great! Most other companies are coming in our direction, including Harley competitors. A really bad move!”
Harley-Davidson officials declined to comment on the trade issue for this story. During a July 23 earnings call, though, the company acknowledged that retaliatory tariffs have already cost it $100 million.
“Our team has been working intensely to minimize the impact of tariffs on our business in a highly uncertain environment,” CEO Matt Levatich told analysts and reporters, by way of explanation of why both revenues and the stock price were down.
One United Steelworkers official said Trump’s attacks on Levatich brought a moment of schadenfreude at their office, given how deferential the company executives had been toward Trump originally.
“We all kind of laughed about it: ‘There’s your buddy Trump,’” the official said on condition of anonymity, allowing that many of the bargaining unit members remain fans of the president. “The man hasn’t accomplished anything. Unfortunately, some of our members bought into it and voted for him.”
EBET ROBERTS VIA GETTY IMAGESWillie Nelson performs at the 2018 Farm Aid concert in Connecticut. Nelson helped organize the first Farm Aid concert in 1985, and Wisconsin — a pivotal political state — hosted the annual event on Saturday, with Nelson again among the performers.
James Hardiman, a Harley-Davidson analyst for Wedbush Securities, said the upshot for Trump is despite claiming his policies would keep manufacturing jobs in this country, they are instead sending them overseas. “From where I sit, there are a lot of unintended consequences hurting the American worker,” Hardiman said. “Whether or not Donald Trump gets this, nobody knows.”
At the Harley-Davidson powertrain plant in Menomonee Falls on the outskirts of Milwaukee, the number of permanent workers has dropped from about 900 three years ago to 500, while the company is using more “casual” workers without long-term job protection.
“Everyone’s afraid for their jobs,” said one such “casual” machinist, who also spoke on condition of anonymity to avoid angering both management as well as Trump-supporting co-workers. “We kind of have to have a hand-signal and a wink to talk about Trump here. That’s how fervent the pro-Trump people are.”
He compared the president to a “drunken spouse” who lashes out randomly and for whom everyone in the household finds coping tactics. “The whole world is developing tactics to cope with Trump,” he said.
He added that if Trump’s tenure so far offers any clues, the president will claim a tremendous victory, regardless of the tariff war’s status next autumn or how much damage it has caused.
“In the end, I don’t think that he’s going to be successful,” the machinist said.
“We’re just bargaining chips”
Will Hughes squinted into the sun as he showed off the 400 acres of food-grade, organic soybeans that help his family’s farm of 160 years just outside of Janesville soften the blow from Trump’s tariff war.
Soften, but not eliminate. While his farm’s organic corn, soy, green beans and other crops are sold almost entirely domestically, their prices still rise and fall with those of their conventional counterparts traded the world over. China’s shutting off its market to much of U.S. agriculture has cost Hughes’ 5,000-acre farm about $500,000 so far on their soybean and corn harvests.
“We’re just bargaining chips at this point,” he said.
His father, Randy Hughes, said he understands Trump’s efforts to end China’s unfair trade practices such as intellectual property theft, and he agrees with that goal, even if it means a short-term hit to his business. “Is it worth it? Well, I’m not one of those guys who’s been snuffed out yet,” he conceded. “I wonder if I would think it’s worth it if I was one of those guys.”
Cindy Brown’s Chippewa Valley Bean Company, meanwhile, should have been largely immune from Trump’s trade war with China. While her family business in the western part of Wisconsin does some farming, its more profitable activity is processing kidney beans for export to Europe. But when Trump hit the EU and other countries with tariffs on steel and aluminum, the tariffs that the EU responded with on U.S. goods included, along with motorcycles, kidney beans.
“We’re on pins and needles right now,” she said, explaining that she had to absorb much of the increased costs herself as some of her European buyers could not pass them along to their customers, many of whom had fixed-price contracts with supermarket chains.
“I don’t understand why if we’re using trade policy to set the world straight, why it has to be the farms that are taking the worst of it,” she said
She added that her family moved to Menomonie, not far from the Minnesota border, in 1858, and that the farm and processing company had gone through a number of ups and downs ? most of them caused by the vagaries of mother nature, not government policy. “This is the worst thing that the government has ever done to us,” she said.
Losing jobs already
A slew of statistics backs up Brown’s exasperation. Wisconsin led the nation in farm bankruptcies last year. Farm Aid’s hotline is fielding a record number of pleas. “We get calls every day from farmers thinking about suicide,” said Farm Aid’s Harvie. “We’re kind of in unprecedented territory.”
Trump’s frequent assertions that his taxpayer-financed bailouts of the nation’s farmers are making them whole, meanwhile, is largely falling on unbelieving ears.
Soybean grower Jasper said that the crop’s value has lost $3 per bushel because of Trump’s trade war, but farmers like him and his son are only getting about $1 per bushel in government payments. “I’m no genius, but if you lose three and you get back one, that’s a net loss of two,” he said, adding that for his son, the net loss last year was $60,000.
“No, it’s not sustainable,” he said with a shrug. “At some point you just give up.”
On the manufacturing side, Wisconsin will wind up losing 37,000 jobs because of Trump’s trade war, according to the pro-trade group Tariffs Hurt the Heartland, while the state’s businesses and residents have already paid $598 million in higher costs for goods and services because of U.S. tariffs.
And on Friday, a U.S. Labor Department release suggested those job losses are already underway. Wisconsin had 5,200 fewer manufacturing jobs in August than it did a year ago. That figure was exceeded only by Pennsylvania, which shed 7,700 manufacturing jobs.
In Lake Geneva, just a few miles south of where Willie Nelson and others took the stage Saturday afternoon, Paul Shekoski’s Primex for decades has been manufacturing health-care monitoring equipment and weather stations in China for the consumer market in the United States.
With the tariffs, suddenly a weather station priced at $150 carries a tariff of $23. The problem for Shekoski: While many Americans interested in home weather stations will pay $150, they are unwilling to pay $173. “We are seeing our demand dropping,” he said.
Unable to pass the U.S. tariff along to retailers, Shekoski said he has been eating much of that cost. “We will lose twice as much on tariffs annually than we make in any given year,” he said. “We’re not investing in our future. We’re fixing our supply chains.”
If Trump and his campaign are not paying attention to what’s happening in Wisconsin, they are making a big mistake, he said. “Maybe people with small businesses will give him a pass and want to give him another term,” Shekoski said. “But the farmers are getting hugely affected. We’ll see how long they stick with him.”
Jasper suspects the answer to that: not much longer.
“So many of them are seeing that Trump didn’t help them. He made it worse,” Jasper said. “A lot of people in rural America voted for him, and I understand why they did. They voted for change. Well, be careful what you wish for.” |
