See which industries will feel the most pain from a China-U.S. trade war
Mark T. Anderson, whose company is one of the West Coast’s top exporters of livestock hay, is glad to see trade become an issue in this year’s midterm elections, but not in ways he’d expect. His fellow Republicans are on the defensive over Trump’s trade wars, allowing Democrats to present themselves as better protectors of agriculture, and opponents of destructive tariffs.
“It’s crazy,” said Anderson, president of Anderson Hay and Grain Co. in Ellensburg. “A lot of what Trump is doing is more Democratic than Republican. “This ‘America-first’ agenda, or whatever you call it, has really shaken things up.”
It has indeed. In at least two of Washington state’s competitive House races, Democrats have seized on Trump’s policies as a threat to the state’s export industries, worth more than $75 billion annually. Washington is one of the few states that runs a trade surplus with China and the rest of the world. Boeing sells more than $40 billion in aircraft abroad each year, and Washington’s farmers have developed lucrative Chinese markets for exported apples, cherries and other products.
In the race for the 8th Congressional District, which stretches from Ellensburg to the suburbs of Seattle and Tacoma, Democrat Kim Schrier, has been hitting Republican Dino Rossi for not speaking out against Trump’s confrontational policies with China, which have triggered retaliatory tariffs. From January to June, U.S. cherry exports to China were down 34 percent, apple exports were down 20 percent and wheat and hay exports from the Northwest also dropped.
“The tariff wars are really hurting our farmers,” Schrier, a pediatrician and first-time candidate, said in a televised debate last week in Ellensburg. “They are hurting our cherry farmers, our apple farmers and our hay farmers. But my opponent has stayed silent.”
When asked if he supported Trump’s tariffs, Rossi, a former state lawmaker, said that “no one wins trade wars,” a standard campaign line. Yet during the debate, Rossi declined to directly criticize Trump for his trade policies, instead using his time to list the agriculture groups that have endorsed him.
Talking trade is tough for both parties in the Trump era. In a competitive district such as the 8th, Republicans such as Rossi want to separate themselves from Trump without alienating the president’s supporters by directly criticizing him.
At least one outside group, the U.S. Chamber of Commerce, is apparently concerned that Rossi could be vulnerable on the trade issues. In July, the Chamber spent $200,000 on TV ads in Washington touting Rossi’s support for free trade, without mentioning Trump’s tariffs.
“Forty percent of Washington jobs depend on trade.” a narrator says in the ad, which is interspersed with images of Rossi and cherries, wheat and other Evergreen state exports. “We need someone in the other Washington who gets that.”
While Republicans work to burnish their trade credentials, Democrats confront the delicate dance of making Trump seem reckless without alienating constituencies suspicious of trade deals. At the urging of their union supporters, Democrats helped torpedo the Trans Pacific Partnership and many were highly critical of the North American Free Trade Agreement, which Trump has worked to revamp.
But even with their uneven history on trade, Democrats see an opening as China’s retaliatory tariffs start to be felt in Washington and other states. Those impacts allow Democrats to portray their party as a safer guardian of the U.S. economy. As Schrier said earlier this year, “President Trump’s unpredictable, governing-by-tweeting trade policies hurt our district.”
Washington state’s largest employer is Boeing, with 81,000 workers spread across several plants, one of which is in Auburn, east of Tacoma and in the 8th district. Boeing is the largest exporter of any U.S. manufacturer, and in 2017, China purchased roughly one of every four airplanes it manufactured, according to Morningstar, an investment research firm.
Boeing stands to lose billions of dollars in business if China targets it for tough tariffs and starts purchasing from rival Airbus, a French company.
“It is certainly concerning,” said Larry Brown, legislative director for the Aerospace Machinists Union District 751, the main union for Washington state’s Boeing employees. “We sell a lot of airplanes to China, and we always seem to be in a vice with them.”
For Boeing’s union members, said Brown, one big issue is continuation of the Export-Import Bank, which offers government-backed loan guarantees to foreign customers wanting to buy U.S. manufactured products.
Boeing and General Electric are two companies that have benefited from the Export-Import Bank, but Republicans in Congress have repeatedly attempted to kill the credit agency, a product of the New Deal era. The machinists are also disappointed that Trump and Republicans haven’t challenged Boeing’s plans to build an aircraft finishing plant in China, which could ultimately could hurt U.S. jobs, Brown said.
“Trump hasn’t stood up for us,” said Brown, whose union district has 29,500 members and has endorsed Schrier and other Democrats in House races.
In northeast Washington state, the dynamics are different. In the 5th Congressional District, agriculture is the dominant industry in several counties, where farmers have been loyal supporters of both Trump and Republican Cathy McMorris Rodgers, who is seeking her eighth term in office.
Yet McMorris Rodgers is facing an unexpectedly strong challenge from Democrat Lisa Brown, a former economics professor. Earlier this month, the White House dispatched Vice President Mike Pence to Spokane to campaign for McMorris Rodgers and against Brown, who has criticized her opponent for not standing up to Trump on trade issues.
“I support an aggressive return to multilateral trade agreements for agriculture with Asian countries,” Brown said in a recent interview with the (Spokane) Spokesman Review.
In both the 5th and 8th districts, farmers who export grain and hay are starting to feel the pain of China’s retaliatory tariffs.
China was once a major buyer of soft white wheat, grown in the Northwest and used by Chinese bakeries for pastries. But since May, Chinese orders for soft white wheat have dried up, following a 2017-18 marketing year when China purchased 330,000 metric tons, worth more than $60 million, said Scott Yates, a spokesman for the Washington Grain Commission, a self-governing state agency.
“Things were looking good. We were very hopeful,” said Yates. “Then the tariff happened and everything was shut down.”
China has also become a key destination for compacted alfalfa grown in western states. Chinese companies need such feed for the nation’s burgeoning dairy industry, and U.S. hay growers enjoy cheap shipping rates in cargo vessels that would otherwise return empty to China.
Anderson, the Washington state hay exporter, has seen his family’s business grow exponentially, largely because of exports to Asia. With more than 350 employees, the company is widely seen among the top-two hay exporters to China, which buys more than 1 million metrics every year.
On a recent bright fall day, a parade of trucks could be seen motoring into the company’s Ellensburg plant and unloading bales of fresh-cut hay. Workers in warehouses scurried to feed the alfalfa into compacting machines, producing clouds of dust and tight bales that then were placed in shipping containers, in route to Washington state ports.
Anderson is concerned that, when the fall export numbers are revealed, U.S. alfalfa exports will experience a sharp drop, which could worsen if the trade war drags on. Like many in agriculture, Anderson is hopeful that Trump’s tough trade policies could prompt concessions from China, as they have, to some degree, from Mexico and Canada. But he also acknowledges a lengthy trade war could be punishing.
“At the end of the day, there’s a lot to be gained in our country with predictable, reliable trading relationships,” said Anderson, who has tended to support Republicans for office. “That said, there’s a lot of debate on how that should be done.”