(Bloomberg Businessweek) -- President Trump may insist—as he did on Twitter Wednesday morning—“We are not in a trade war with China,” but the $50 billion in tariffs his administration proposes putting on Chinese goods has already spooked markets, with a broad sell-off hitting U.S. stocks. The damage could also extend to the U.S. midterm elections.
China on Wednesday said it would issue 25 percent retaliatory levies on roughly $50 billion of U.S. imports, including soybeans, cars, chemicals and aircraft. These levies appear to be targeted at states, particularly in the Midwest, where Trump’s support is strongest. But, crucially, many of these states also have pivotal Senate and gubernatorial races in November. The economic blow from new tariffs could upend many of these races, potentially shifting control of statehouses and the U.S. Senate to Democrats.
Take soybeans. In the 2016 election, Trump won eight of the 10 states with the largest soybean acreage, all of them in the Midwest. Many of those same states are now host to some of the country’s closest races for Senate (Missouri, Indiana, North Dakota) and governor (Ohio, Michigan, Iowa, Minnesota).
Political experts say the economic impact of Chinese tariffs on farmers may play out at the ballot box in November. “The farm community is a pretty powerful voting bloc,” said Jennifer Duffy, who follows Senate and governors races for the nonpartisan Cook Political Report. “If they are unhappy, they turn out in big numbers and can really change things in a hurry.”
That’s a potential boon for Democratic candidates. Three of the four most vulnerable Democratic Senate incumbents hail from Indiana, Missouri, and North Dakota—states that stand to be hit hardest by Chinese soybean tariffs.
And it’s bad news for Republicans. In Illinois, whose 10.6 million acres of soybeans are more than any other state’s, the incumbent governor, Bruce Rauner, already trails his Democratic challenger, Hyatt hotel heir J.B. Pritzker, according to recent polls. Republicans are also defending statehouses in what are expected to be close races in Wisconsin and Ohio.
“This could be very good for Democrats,” said Duffy. “Trump started this. It makes Republicans’ bid to hold the Senate harder. And it might even make Republicans start looking over their shoulder at places that shouldn’t be competitive, like Nebraska and Mississippi, where the Democrat, Mike Espy, is a former Agriculture secretary.”(Corrects the title of the map of planned soybean acreage in 2018.)
To contact the author of this story: Joshua Green in Washington at jgreen120@bloomberg.net.
To contact the editor responsible for this story: Matthew Philips at mphilips3@bloomberg.net.
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