Amer­i­can vot­ers just sent a sur­pris­ing mes­sage about sent a sur­pris­ing t the trade war

Financial Chronicle - - DEEP DIVE - BLOOMBERG

The trade war of 2018 was, in the­ory, sup­posed to hurt Repub­li­cans in states vul­ner­a­ble to higher tar­iffs and Chi­nese re­tal­i­a­tion. The re­sults from Tues­day’s midterm elec­tions sug­gest that didn’t re­ally hap­pen.

Pres­i­dent Don­ald Trump’s tar­iffs were a hot topic in farm­ing re­gions and the rust belt -- places with a lot to lose in the dis­pute with China, which coun­tered with du­ties on iconic Amer­i­can ex­ports from soy­beans to lob­sters. Yet sev­eral can­di­dates who op­posed Trump’s tar­iffs were de­feated, while some who backed the du­ties won their races.

The out­come gives the US pres­i­dent lit­tle in­cen­tive to soften his hawk­ish trade strat­egy. A po­ten­tial turn­ing point is com­ing at the end of this month, when the pres­i­dent is ex­pected to meet Chi­nese pres­i­dent Xi Jin­ping at the Group of 20 sum­mit in Ar­gentina. Here’s how the re­sults played out in races where trade was a big is­sue.

Key trade races

Demo­crat Claire McCaskill lost her Se­nate seat in Mis­souri to Repub­li­can Josh Haw­ley. McCaskill warned that Trump’s trade war is hurt­ing farm­ers, ranch­ers and man­u­fac­tur­ers in the state. The race was a tossup head­ing into the elec­tion, ac­cord­ing to po­lit­i­cal site RealClearPol­i­tics.

Repub­li­can Con­gress­man Mike Bost re­tained his seat in Illi­nois’ 12th dis­trict, beat­ing Demo­crat Bren­dan Kelly. Bost, whose dis­trict in­cludes the Gran­ite City Works mill op­er­ated by US Steel, sup­ported Trump’s tar­iffs on steel and alu­minum. Bost was lead­ing be­fore the vote, polls sug­gested.

Demo­crat Heidi Heitkamp lost her Se­nate seat in North Dakota, fall­ing to Repub­li­can Kevin Cramer. Heitkamp was trail­ing by nine points in polls be­fore the vote. Dur­ing the cam­paign, she at­tacked Trump’s tar­iffs and sought to cap­i­talise on angst among soy­bean farm­ers hit by Chi­nese re­tal­i­a­tion.

Repub­li­can Martha McSally was nar­rowly lead­ing in Ari­zona, though the race still re­mained too close to call by Wed­nes­day. Her op­po­nent Kyrsten Sinema warned that Trump’s tar­iffs were hurt­ing Ari­zona busi­nesses and farm­ers.

Demo­crat Sher­rod Brown re­tained his Se­nate seat in Ohio, beat­ing Repub­li­can Jim Re­nacci. Brown lined up be­hind the pres­i­dent on trade, sup­port­ing the steel tar­iffs.

In In­di­ana, Demo­crat Joe Don­nelly lost his Se­nate seat. Don­nelly and his op­po­nent Mike Braun cast them­selves as de­fend­ers of Amer­i­can man-

ufac­tur­ers. Trade was men­tioned in TV ads in the race more than any other Se­nate con­test, ac­cord­ing to Kan­tar Me­dia’s CMAG, which tracks po­lit­i­cal ad­ver­tis­ing.

In a vic­tory for es­tab­lish­ment pro­trade con­ser­va­tives, Repub­li­can Bryan Steil de­feated Demo­crat Randy “Iron­stache” Bryce in Wis­con­sin’s first House dis­trict, the seat be­ing va­cated by out­go­ing House speaker Paul Ryan.

The Repub­li­cans did suf­fer some losses in farm states. Democrats flipped two seats in Iowa, where corn and soy­bean farm­ers have com­plained about tar­iffs. Demo­crat Abby Finke­nauer won in the state’s first dis­trict, while Cindy Axne pre­vailed in the third dis­trict.

US pres­i­dent Don­ald Trump is ex­pected to meet Chi­nese pres­i­dent Xi Jin­ping at the Group of 20 sum­mit in Ar­gentina

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