Biden Takes On ‘Trump’s Tariffs’

The Democrat seems to think protectionism isn’t popular in Iowa.

Are tariffs popular? Donald Trump seems to think so and, after nearly 18 months of imposing the border taxes willy-nilly, many Republicans seem to agree. They may soon get a political test of that proposition as Joe Biden, the Democratic leader in the 2020 race against Mr. Trump, took direct aim at the cost of tariffs in Iowa on Tuesday.

He added: “And how about manufacturing? Trump’s tariffs and trade wars are hitting a lot of American manufacturing—especially the American automobile industry—choking it to within an inch of its life.”

.. “America’s farmers have been crushed by his tariff war with China,” Mr. Biden said in remarks Tuesday evening in Davenport. “He thinks he’s being tough. Well, it’s easy to be tough when someone else is feeling the pain. How many farmers across this state and across this nation have had to face the prospect of losing their business, of losing their farm because of Trump’s tariffs?”

For one thing the tariff issue gives Mr. Biden a way to attack Mr. Trump on jobs despite the strong economy. Talking tough about alleged foreign cheaters is popular in the abstract. But when the costs become visible, in higher prices and lost markets from foreign retaliation, public support may drop. Talking about the pain of tariffs lets Mr. Biden focus on specific damage rather than having to dispute the health of the national economy.

 

.. Mr. Biden was also shrewd Tuesday to walk back his claim in May that China isn’t competition for the U.S. “We are in a competition with China,” he said. “They are a serious challenge to us, and in some areas a real threat.” But he added that “while Trump is pursuing a damaging and erratic trade war,” China is investing in “technologies of the future.” He then took the appealing line that the U.S. “can out-compete anyone.”

The Democratic front-runner is hardly pure on tariffs, having suggested only last week that they can be a tool to enforce carbon-fuel limits on other countries. He also favors much higher taxes, and his climate agenda is a Big Government fantasy. But in attacking Mr. Trump’s tariffs, he is setting himself apart from protectionist Democrats Bernie Sanders and Elizabeth Warren and reaching out to free-trading farmers and other American exporters.

All of which ought to be a warning to Mr. Trump. Farmers and business CEOs have been willing to give the President some political leeway on his tariffs because he says they are leverage for better trade deals. But if the deals don’t materialize, and the only tangible result is the pain, the politics of tariffs might not look so appealing in 2020.

Mr. Trump won Iowa in 2016 by 9.4 percentage points. In the most recent Iowa poll for 2020, in March, he trailed Mr. Biden by six.

Trump’s Trouble in the Farm Belt

This means the trade fight has cost U.S. farmers a bundle when they least can afford it. In 2017 U.S. farmers sent 25%—some $140 billion—of production abroad. More than 17% went to China. But then the U.S. imposed tariffs against Chinese products, and Beijing retaliated with sizable tariffs on 90% of U.S. farm exports. American Farm Bureau Federation President Zippy Duvall says that “in 2018, U.S. agricultural exports to China declined $10 billion—about a 50 percent loss.”

China was once the second largest export market for U.S. agriculture but it’s now fourth. “This is a drastic reversal for what had been a growing market,” wrote Mr. Duvall in a recent letter to the President. “From 2000 through 2017, the value of our agricultural exports to China grew from 2 percent to 16 percent of total U.S. agricultural exports.”

American soybean farmers sent about 60% of their exports to China in 2017. But their Brazilian competitors pay a 3% Chinese tariff while Americans now pay 28%. In 2018 U.S. soybean exports to China fell 75%, and U.S. farmers had to cut prices to unload oversupply in other markets. The total value of soy exports fell $4.3 billion—a 20% decline.

Or consider pork exports, 40% of which has traditionally gone to Mexico and China. U.S. pork exports by volume to China dropped 58% in September 2018 from a year earlier and 80% since 2016. Mexico’s 20% tariff on U.S. pork exports, in retaliation for Mr. Trump’s steel tariffs, cost the pork industry an estimated $1.5 billion in 2018.

None of this comes as a surprise to Mr. Trump, who has been hearing complaints for months from his Farm Belt supporters. That’s why Mr. Trump is responding with the $16 billion in subsidies, most of which will be direct payments to farmers. These are in addition to the subsidies under traditional U.S. farm programs.

So in order to make up for losses from trade, Mr. Trump is dunning other American taxpayers. But as Bill Gordon, vice-president of the American Soybean Association, recently told the South China Morning Post, farmers don’t want welfare. “Here’s a handout to make you happy? That doesn’t make us happy. We want our markets back,” Mr. Gordon said.

The argument for enduring this pain is that it is the price of getting China to change its predatory trade practices. Short-term pain for some will lead to long-term gain for everyone. The game theory is that Mr. Trump has to show China’s Xi Jinping that he is willing to absorb more pain for longer than Mr. Xi can. But then the pain is in Kansas, not Washington.

Not long ago Mr. Trump said he wanted a China trade deal but lately he’s been suggesting he’d be as happy running for re-election in 2020 as the trade hawk who was willing to take on China. We wonder how Iowans will feel about that if farm incomes continue to decline for another 18 months.