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Republicans gain Senate seats; Democrats take control of House

Legislative Watch: Record voter turnout on election day results in split Congress; study finds tariffs outweigh gains from USMCA.

Voters on Tuesday voted for a split Congress with Republicans increasing their hold on the Senate and Democrats taking control of the House of Representatives. As of now, the Republicans have gained two Senate seats and the Democrats have gained at least 30 Congressional seats to take back control of the House of Representatives.

There are still a number of House seats to close to call and potential recounts. The Florida Senate race is headed to a recount and the Arizona Senate race is too close to call at this time. Also, there is a Senate runoff election in Mississippi between Sen. Cindy Hyde-Smith (R) and former Secretary of Agriculture Mike Espy on Nov. 27.

The 116th Congress will include a record number of women: first Native American women — Sharice Davids (D-KS) and Deb Haaland (D-NM); and the first Muslim women — Rashida Tlaib (D-MI) and Ilhan Omar (D-MN).

Senate: Republicans have defeated Democratic incumbents in Indiana, Missouri and North Dakota, and lost a seat in Nevada with three races still to be decided. Going into the election the Democrats were defending 26 seats and the Republicans only nine. Nine Democratic incumbents represented states that Trump carried in 2016.

House: Democrats are projected to gain more than 30 Congressional seats to take control of the House. The largest gains for the Democrats were in suburban districts. The key states for the Democratic gains were California, Pennsylvania, New Jersey, New York and Virginia. The election results will provide for a more-divided House with the Republican caucus becoming more conservative and the Democratic caucus more liberal.

Senate Agriculture Committee: The Senate Agriculture Committee will have at least two new members with the defeat of Sens. Joe Donnelly (D-IN) and Heidi Heitkamp (D-ND). Also to be watched is the aforementioned Nov. 27 runoff between Hyde-Smith and Espy in Mississippi.

House Agriculture Committee: There will be a large number of new members of the House Agriculture Committee with the Democratic takeover. There were four vacancies prior to the election as the result of retirements of Bob Goodlatte (R-VA) and Rick Nolan (D-MN), and Tim Walz (D-MN) elected governor of Minnesota and Michelle Lujan Grisham (D-NM) elected Governor of New Mexico. Congressman John Faso (R-NY) was the only committee member defeated.

Record voter turnout
A record number of voters turned out for the 2018 election compared to recent off-year elections. Exit polls showed:

  • 67% of the voters say President Trump was a factor in how they voted.
  • Trump job approval — 44% approve of Trump’s job performance and 54% disapprove.
  • Women voted by a 20-point margin for House Democrats — 59%-39%.
  • Men voted 50% for Republicans and 48% for Democrats. Young voters, ages 18-29 voted Democratic by 36%; voters 30-44 voted Democratic by 21%; and older voters split evenly.
  • Nearly 30% of the voters identified as Independents.
  • Independents voted by a 12% margin for Democrats — 54%-42%. In 2014, Independents supported Republican candidates by 12% and 4% in 2016.
  • First-time voters represented 16% of the vote and went Democratic 62%-35%.

Tariffs outweigh USMCA gains
The agricultural market access gains under the United States-Mexico-Canada Agreement will be negated by the retaliatory tariffs Canada and Mexico imposed on the United States because of the tariffs President Trump imposed on imported steel and aluminum. This was the finding of a study, “How U.S. Agriculture Will Fare Under the USMCA and Retaliatory Tariffs,” commissioned by the Farm Foundation and completed by Purdue University.

The study estimated U.S. agricultural exports will increase by $450 million, mostly in dairy and poultry, because of the USMCA. However, the Canadian and Mexican retaliatory tariffs will cause U.S. agricultural exports to decline by $1.8 billion.

Congress is expected to vote on USMCA next year. If for some reason Congress fails to approve the trade agreement and the United States withdrew from the North American Free Trade Agreement, U.S. agricultural exports to Canada and Mexico would drop more than $9 billion.

Key findings

  • The USMCA maintains relatively free market access across the United States, Mexico and Canada, particularly in agriculture. It improves market access for U.S. dairy and poultry exports to Canada, providing a positive export bump in those sectors of $450 million. Dairy exports are expected to increase by 5% and exports of other meat products by 1.6%.
  • The USMCA has measurable impacts on exports of dairy and poultry to Canada, and “modest” impacts on farm income and labor demand.
  • The USMCA was reached in a “volatile trade policy environment” that will create headwinds for U.S. farmers due to retaliatory measures by not only Canada and Mexico, but other nations such as China. Specifically, retaliatory tariffs from Canada and Mexico could cause U.S. agricultural exports to decline by $1.8 billion, and by $1.9 billion to these two key trading partners, and the broader trade retaliation could cause U.S. agricultural exports to decline by $7.9 billion, thus overwhelming the small positive gains from the USMCA.
  • In the 25 years since NAFTA was formed, the share of U.S. agricultural exports to Canada and Mexico has increased to almost 30%, from 14.2 %. The analysis cites a study which indicates “a withdrawal from NAFTA, with tariffs reverting to MFN levels, would create a decline in U.S. agricultural exports of more than $9 billion and a loss of export revenue of $12 billion with the two NAFTA partners.”

The report is available on the Farm Foundation’s website.

TAGS: Regulatory
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