Economic Nationalism in the Heartland

John Deere, established in 1837, is an iconic brand and a symbol of the American heartland. This is especially true in Iowa. John Deere machinery toils in fields, yards, and construction sites across the state, and the famous leaping deer logo is itself a ubiquitous fashion choice.

John Deere is also a major multinational corporation and, in anticipation of a potential slowdown in the agricultural economy, the company has recently announced layoffs. The impact will be felt by many Iowa families who depended on those jobs for their livelihood. Layoffs in the face of industrial headwinds are unfortunate, but understandable. Less understandable is the news that Deere is simultaneously planning to build a manufacturing facility in Mexico. There is still plenty of work to be done building farm equipment; Deere just doesn’t want to do it in Iowa. This, despite receiving $20 million in 2023 from Iowa’s Research and Activities tax credit, more than any other company.

Many analysts believe Iowa voters thus face a conundrum: On one hand, the economic nationalism and trade policies promoted by politicians like former President Donald Trump respond to their frustration with globalization and de-industrialization. On the other hand, as one of the largest agricultural exporting states, Iowa especially benefits from free trade and is especially vulnerable to the retaliatory trade policies that other countries might pursue. But Iowans don’t see it that way.

Whether on a farm or in a factory, running a small business or working in some other occupation, the principles of America First resonate strongly here, and with it policies rooted in economic nationalism. Iowans, at least at the grassroots level, are not ideologues when it comes to trade. We are “conservatives of the heart,” as Pat Buchanan described his fellow Americans in his 1992 address to the Republican National Convention. Like so many Americans, we have come to realize that the United States has become too dependent upon foreign production for necessities, with devastating effects for not only the manufacturing industry’s success, but also the flourishing of the middle class, and the sovereignty of the nation.

We are prepared to make our share of the sacrifice to make things right.

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In an October “commit to caucus” campaign stop in Cedar Rapids, before the 2024 Republican presidential caucus, Trump promised his enthusiastic audience “a revival of economic nationalism.” In his speech, Trump stressed remaking American trade policy with proposals including a Reciprocal Trade Act, a strategic tariff that would apply a 10 or 20% “across-the-board tariff on foreign goods,” and would remove China’s Most Favored Nation (MFN) status. This agenda, Trump said, would put “the great state of Iowa … at the center of the action.”

These ideas were nothing new to Iowa voters. During the 2016 and 2020 presidential campaigns, Trump campaigned aggressively on them. In office, his administration followed through: tariffs on steel and aluminum, renegotiation of several trade agreements including NAFTA, broad confrontation with China. And the drawbacks were familiar, too. China’s retaliation against American exports directly impacted Iowa farmers.

Nevertheless, a survey of 605 Iowan farmers prior to the Iowa caucus in 2024 found that 39% supported President Trump, while just 19% supported Florida Governor Ron DeSantis and 8% supported President Joe Biden. Among Republicans, support for Trump was higher, and he would go on to win the caucus with more than 50% of the vote.

A presidential candidate promising “a revival of economic nationalism” would seem unlikely to thrive in a state generally supportive of free trade. From corn and soybeans to hogs and turkeys, agriculture is a pillar of the Hawkeye State’s economy. And Iowa is the second largest exporter of agricultural products, behind only California. Historically, free trade has been political “gospel” and in recent decades Iowa’s congressional delegation has tended to support free trade agreements. Many of the most powerful special interest groups are likewise enthusiastic about globalization.

But while larger corporations and the major agribusinesses supported free trade agreements, small family farmers and ranchers tended to oppose them. The argument made by these small farmers and ranchers was that deals like NAFTA only benefited corporate farms and multinational companies. Larger farms started to expand more quickly, and other crops were soon replaced by corn and soybeans to be exported. As an example, by 2017 most of Iowa’s apple orchards had been replaced by corn and soybeans. Many small farmers and ranchers found it difficult to compete with imports from Mexico and Canada, while others experienced trade barriers that prevented them from selling their commodities.

The call from agriculture is often “markets rather than subsidies,” but even after numerous trade agreements, American agriculture is still dependent upon subsidies, many of which benefit the larger corporate farms.

Illustrating the point, CNN’s “All Over the Map” project, an initiative “to track the 2024 campaign through the eyes and experiences of voters who live in key battlegrounds and are members of critical voting blocs or areas in those states,” has been following Shanen Ebersole, an Iowa rancher who supported former South Carolina Governor Nikki Haley in the caucus and has now decided to support Trump. “It’s definitely a vote for Trump,” she said, “because we have to put the American people first.” Specifically, she highlighted Trump’s trade policies as benefiting her ranch. “We just want to live in the middle of nowhere and raise cows and feed our neighbors across the country.”

Small ranchers also care a lot about mandatory Country of Origin labeling, which would ensure consumers know where their beef and pork is born, raised, and processed. Country of Origin rules had once applied, but were repealed by Congress because they conflicted with WTO global trade rules. A vague Country of Origin requirement is now law, but it only covers certain commodities. Small ranchers have had a challenging time, even during the Trump administration, in battling larger firms who oppose this direct labeling.

The larger firms oppose direct labeling because current law allows them to use misleading “Product of USA” labels. The consumer may think that since the beef has a “Product of USA” sticker that it was raised and fed on an American ranch, but as long as it is processed or repackaged in the United States it qualifies for this “USA” label. Larger firms can import cheaper beef and then undersell American ranchers. The Country-of-Origin saga also underscores the loss of sovereignty that accompanies free trade agreements. Congress repealed the more stringent labeling requirements in 2015 after the WTO ruled them a trade violation.

Nor is agriculture the main economic driver of the local economy. Another critical fact to understand about a state like Iowa is that, while it may be known for its endless expanses of corn, it is first and foremost a manufacturing powerhouse. The 18% of GDP in its manufacturing sector dwarfs the 6% in agriculture, forestry, fishing, and hunting, and exports of manufactured goods equal exports of agricultural goods.

Many manufacturers in Iowa closed down under pressure from foreign competition or relocated their own production offshore, with devastating effect on their communities, especially in rural areas. In the mid-1990s, the Ertl Toy Company, based in Dyersville, Iowa (home to the “field of dreams”), was sold and a portion of the manufacturing outsourced to Mexico. Maytag, which had manufactured washing machines in Newton, Iowa for close to 100 years, was purchased by Whirlpool and the plant was shut down in 2007, with the jobs again sent to Mexico. The Scheaffer Pen Corporation, based in Lee County, Iowa, closed in 2008, the production outsourced.

Small businesses also pay the price for unfair Chinese competition. Kelley Plastics, in Belle Plaine, Iowa, manufactures the Ballback Pro, a device that returns a basketball after it has been thrown through the hoop. In 2022, its leading customer, Dick’s Sporting Goods, stopped purchasing the product. Instead, the big-box retailer would distribute a similar product, made in China.

Critics of economic nationalism argue that President Trump started a “trade war” with China, but China had already started the war long ago—the only question was whether we would defend ourselves. When he levied tariffs on Chinese imports to address trade abuses and create pressure for a negotiated agreement, China retaliated by targeting American agriculture. But thanks to the revenue that the tariffs raised, the federal government was able to provide Iowa farmers with $28 billion in support to cushion the blow.

Iowa farmers were not thrilled with the idea of needing $28 billion in support, but they understood the reason behind the payment. They were being targeted in a trade war that had started long before President Trump even assumed office, and rebalancing trade after decades of foolish policy would not be easy or costless. What Trump was doing was in the national interest and would pay dividends long into the future. The support was helpful in riding out the storm, and would only be needed temporarily.

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Iowans also have concerns that extend far beyond their own pocketbooks, and understand that economic nationalists like Trump are trying to address much larger problems when it comes to trade. His campaign themes of “America First” and “Make America Great Again” appealed to many Iowans, especially those who felt that they had been forgotten. He highlighted the massive trade deficits and spoke about bringing manufacturing back and preventing companies from outsourcing jobs.

Trump was not the first candidate to campaign against free trade in Iowa. Past Republican contenders such as Patrick J. Buchanan, former Representative Duncan Hunter, former Senator Rick Santorum, and former Arkansas Governor Mike Huckabee did so, too. On the Democratic side, former Representative Richard Gephardt and Senator Bernie Sanders had a similar message. But Trump was the first to seriously address both the trade deficit’s damage to our long-term economic prospects and the threat of China to our national security. Those matter to us more than how many soybeans we sell in China next year.

For decades, the United States has been running massive trade deficits, with the world overall and with China especially. China has sought to exploit the international trading system for its own gain, taking advantage of the United States through intellectual property theft—which concerns many Iowa businesses—currency manipulation, and subsidies to their own industries. The result has been to transfer not only jobs, but also technological leadership and economic growth across the Pacific.

The trade imbalances also make China an enormous “investor” in the American economy, which really just means they are buying our assets—including land. More than three-quarters of Iowans support laws that would limit foreign ownership of farmland; they are concerned about control of food processing. Last year, Iowa prohibited its public pension fund from investing in companies controlled by the Chinese military or government, and Governor Kim Reynolds asked Vanguard to create investment products that excluded “any investments in China.”

Protectionism does not mean opposition to trade. The objective of protectionism or economic nationalism is to place the interests of the nation first. Trade agreements should work for the benefit of the American manufacturer, worker, and farmer. This was the actual policy of the Republican Party from President Abraham Lincoln through President Herbert Hoover—even Ronald Reagan was a protectionist when circumstance required.

“Americans are producers first, consumers second. Good jobs, high wages, and strong families should be the objective of trade policy. Productive American businesses can make profits under rules that prioritize our workers, farmers, and communities,” wrote Ambassador Robert Lighthizer, who served as United States Trade Representative in describing the Trump administration’s trade policy. Sign Iowa up.