Rural bank presidents in a 10-state area including Missouri and Illinois said the Trump administration’s trade war is hurting their local economies. And while they still back the president in getting tough on China, that support is waning.
The information comes from Ernie Goss, professor of economics at Creighton University, who surveys small-town bank presidents to get their take on the local economy.
“There is a rising concern about trade tensions,” Goss said. “About how it’s going to continue to put pressure on the agricultural economy and in turn all aspects of rural economies.”
Goss said the bankers he surveys have consistently acknowledged the short-term challenges of Trump's tariffs on other countries and the retaliatory tariffs those counties have put on U.S. goods.
But Goss said the consensus that the trade disputes would be good in the long run is starting to fall apart.
“Each month we are seeing more and more of the bankers indicating that perhaps we need to cut tariffs, or at least cut a deal with China and move on,” Goss said.
While the rural economy is struggling with the effects of the trade war, the impact of heavy spring rains and flooding is also at hand.
The wet weather is actually a short-term boost to the rural economy, via increases in spending as rebuilding efforts get underway.
But Goss said that is short lived, and the floods will hurt more in the long run.
“For example, roads throughout the region have been damaged. We’re seeing the infrastructure damaged, and there will be some negative impacts from that also going forward,” Goss said.
Goss added that a poor harvest this fall because of the floods in the spring will have a negative impact on the agricultural economy.
Federal subsidies designed to assist farmers both with bad weather and the trade war will help, Goss said, but won’t be enough to make up for the damages.
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