The Commerce Department reported on Monday that personal income for farmers fell steeply in the first quarter to its lowest point since 2016. The drop in farm income was so severe that it weighed down the entire nation’s personal income growth even though farmers only make up two percent of working Americans.
Bloomberg reports that farm earnings fell by an annualized $11.8 billion for the first quarter due to the interruption in the exports of farm products to nations such as China. A $12 billion subsidy package for farmers last year propped up farm income for the previous quarter, but farm losses due to the trade war continued this year without being offset by the one-time federal bailout.
Farm losses from the trade war may help to explain the soft support for President Trump across the nation’s farm belt. President Trump’s approval is abnormally low in a number of typically red states with large farming sectors. Per Morning Consult, net approval for Trump is five or below in several states that are usually Republican strongholds such as Georgia, Indiana, Nebraska, and Texas. In the swing farm states of Florida, Iowa, North Carolina, and Ohio, net approval is at zero or below.
Eroding support from farmers, an integral part of Trump’s rural, male, white base, puts pressure on the Trump Administration to finalize trade talks with China, the market for many American farm exports, as soon as possible. US officials have said that they are close to an agreement with China, but the Wall Street Journal reports that several contentious issues remain. These include the removal of current tariffs placed by the president on Chinese imports, enforcement triggers that would reapply tariffs if the Chinese fail to abide by the agreement, and greater access for American companies to China’s cloud computing and farm markets.
Last month, President Trump said that tariffs on Chinese goods could remain for a “substantial period” after an agreement was reached to ensure that China complies. It is unlikely that China would agree to leave the tariffs on their exports in place. This may be one of the most difficult points to resolve in the talks.
White House Economic Advisor Larry Kudlow reportedly told Bloomberg that the Trump Administration is prepared to do more to help farmers. This may mean a second farm stimulus if trade talks are not successfully resolved soon.
As President Trump gears up for his re-election campaign next year, an ailing farm sector and soft support in farm states could be a bellwether for a difficult election. If the Republican farm states are in play, it will be difficult for Trump to repeat his 2016 performance.
Originally published on The Resurgent
Post a Comment