The Epicenter in the Campaign Battle Over Trump's Trade Policies

(Bloomberg) -- The GOP’s bid to win an Indiana Senate seat held by a Democrat could turn on how President Donald Trump’s trade war is rippling through the state’s economy.

Trump’s tariffs, which are altering prices for items such as steel and soybeans, have made the state the epicenter in the battle over trade in advance of the Nov. 6 election. The issue is weighing heavily on a tossup U.S. Senate contest between Democratic incumbent Joe Donnelly and Republican Mike Braun.

The Epicenter in the Campaign Battle Over Trump's Trade Policies

Trade has been mentioned more often in broadcast TV ads in the race than in any other Senate contest, according to data from Kantar Media’s CMAG, which tracks political advertising. Through Oct. 8, the issue had been referenced in 13,655 general election spots in Indiana, more than three times as often as the next closest Senate race.

The state illustrates the issue’s complexity. As the nation’s top steel producer with a large agricultural economy, some are benefiting from Trump’s tariffs on metal imports, even as farmers and manufacturers are being hurt by the duties and retaliatory tax on U.S. exports.

Indiana is Vice President Mike Pence’s home state and among 10 states that Trump won in 2016 where incumbent Democrats are defending their Senate seats. Polls, fundraising and independent analysts suggest Republicans retain an advantage in keeping control of the Senate as Democrats have to defend 26 of the 35 seats on the ballot. Democrats are poised to make significant gains in the House that could give them a majority.

Outsourcing Jobs

In Indiana, both candidates have ties to local companies that have used Chinese imports or Mexican labor as part of their operations, triggering charges and counter-charges of outsourcing U.S. jobs.

Braun, whose campaign continually refers to Donnelly as "Mexico Joe," even criticized the incumbent for using an ax that may have been made in Mexico in an ad where he’s shown chopping wood.

The Epicenter in the Campaign Battle Over Trump's Trade Policies

Indiana, which Trump won by 19 percentage points, ranks first nationally for non-farm employment tied to manufacturing and it’s also one of the top producers of corn, soybeans and pork. That combination has put the state at the center of the U.S. trade war with China.

Even before his tariffs, Trump made his first major trade-related move, as president-elect, by traveling to Indianapolis to claim victory when Carrier Corp. backed away from moving hundreds of factory jobs to Mexico after receiving government incentives to keep them in the state. He’d frequently criticized the closure plans during the 2016 campaign.

The Senate candidates are set to debate for a final time Tuesday evening in Indianapolis as a CBS News poll released over the weekend showed Braun with a lead of 3 percentage points, within the survey’s margin of error. Trump visited the state Saturday and is set to return there twice before the election.

TV Ads

While trade is a nearly constant topic at Trump rallies, the advertising data show the issue’s use in this year’s campaign hasn’t been very widespread.

After Indiana, the next closest Senate races for mentions of trade in general election TV ads are North Dakota (3,917), Ohio (2,386) and Wisconsin (2,322). Trump won all four states.

In House contests, trade has been most often mentioned in New York’s 22nd congressional district, where 1,262 general election spots referenced it through Oct. 8. Trump easily won the upstate district in 2016, but the race between Republican Representative Claudia Tenney and Democrat Anthony Brindisi is rated as a tossup by the nonpartisan Cook Political Report.

In Indiana, where the September unemployment rate was 3.5 percent, the escalating trade war has benefited some businesses, while hurting others.

It isn’t hard to find winners and losers in Elkhart, an Indiana community of about 52,000 near the Michigan border that’s home to manufacturers and suppliers that build the vast majority of recreational vehicles sold in the U.S.

At the Elkhart Supply Corp., a plumbing and electrical supply company, sales for some of the products it produces for the RV industry are up, now that similar goods made in China are facing tariffs.

For others in the area, there’s worry that the added costs associated with tariffs on imported steel and aluminum will hurt the RV industry.

"We’re not happy about it," said Mark Kritzman, who works in purchasing for an RV manufacturer. "The biggest concern is the uncertainty."

Working-Class Voters

Trump won the industrial Midwestern states of Indiana, Ohio, Pennsylvania and Michigan, in part, because he connected with working-class voters who thought both parties had abandoned them on economic issues like trade. Donnelly and Braun have sought to channel his success with those voters.

A recent Donnelly ad shows the senator standing next to a pickup truck’s bed filled with cardboard boxes containing auto parts sold by Braun’s company with "Made in China" stickers on them.

"I voted against every bad trade deal that hurts Hoosiers," Donnelly says. "Mike Braun has used those same trade deals to outsource Hoosier jobs to China."

Braun, a former member of the Indiana House and a multi-millionaire whose company employs hundreds of workers at dozens of U.S. locations, has repeatedly criticized a business connected to Donnelly’s family that used Mexican labor and Chinese materials.

Donnelly’s ad seems oversimplified to Rock Mohr, a Republican-leaning purchasing manager at Elkhart Supply Corp.

"It’s not really fair to say those products are made in China," said Mohr, 58. "There are a few odd parts you just can’t afford to manufacture here."

Ryan Kominakis, 32, a union worker at a U.S. Steel Corp. plant in Gary, said he supports Trump’s moves on tariffs, even though he doesn’t support the president. He’s backing Donnelly.

"He’s a conservative Democrat," he said. "He has tried to support us steel workers."

Ryan Marks, 36, another northwest Indiana resident who sells large industrial equipment, also praised the president’s tariffs.

"The tariffs have been good for our business," he said. "I think Braun understands how trade needs to be fair and I think Donnelly is just touting the party line."

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