A trade war is bad news for farmers such as Rippy, 31, who raises soybeans, corn and cattle on a 1,500-acre farm outside this central Indiana town. But it’s good news for his father-in-law, Barry Burkhart, 50, a millwright in a local steel plant, whose job could depend upon the tariffs keeping steel prices high.
As Washington and Beijing swap threats in their escalating trade dispute, this Indiana family shows how global commerce is marbled through communities across the country. Local residents compete with, sell to and work for foreign enterprises, a reminder that in trade wars, it’s hard to shoot at the enemy without hitting a friend.
“I want to see everybody rise. I don’t know that tariffs are the right solution, because it helps some industries and hurts others” Rippy said. “Maybe we should look for other solutions that help everybody.”
Two products at the center of the trade conflict, steel and soybeans, determine whether this area prospers. No other Indiana county produced more soybeans last year than Montgomery County’s 7.6 million bushels, according to the U.S. Department of Agriculture. No company employs more local residents than steelmaker Nucor, which has about 750 workers in a mill located amid cornfields outside of town.
As a result of its agricultural and manufacturing base, the surrounding county is among the one-fifth of U.S. counties that are most vulnerable to retaliatory Chinese tariffs, according to calculations by Mark Muro, a senior fellow at the Brookings Institution, a think tank.
“My community is concerned about that because things are going so well here right now. We’re hitting our stride,” said Todd Barton, 51, the town’s Republican mayor. “We could be collateral damage. You could see Nucor Steel suffer. You could see our farm economy suffer.”
Trump in recent weeks has moved aggressively to implement his “America First” trade policy, intended to return millions of lost manufacturing jobs to the United States. But by imposing tariffs on solar panels, washing machines and industrial metals — and threatening to put up barriers to $150 billion in Chinese products — the president is protecting some Americans while exposing others to higher prices or to retaliation by U.S. trading partners.
“Personally, right now, it’s great. We’re running like gangbusters,” said Burkhart, who works for Steel Dynamics. “For me and my family, it’s a good opportunity to make money. . . . For my son-in-law, my daughter and her family, it may hurt, and I hate that.”
The trade skirmish with China began with Trump, citing national security considerations, acting to limit imports of steel and aluminum. It has expanded to include potential tariffs on a total of $150 billion in Chinese electronics, aerospace parts and machinery. China has responded by threatening its own import taxes on U.S. products, notably including soybeans, corn and pork.
For farmers, the punch and counterpunch threaten to raise their costs and cut their sales. Although the president later exempted two-thirds of global steel imports from the tariffs, the levies still mean higher prices for the Rippys’ new 15,000-bushel storage bin and for equipment like the new combine they’re considering buying this year.
Those giant machines, which harvest grain crops, cost more than $500,000, so an increase of even a couple of percentage points means thousands of dollars in additional costs.
China buys 61 percent of U.S. soybean exports and more than 30 percent of overall U.S. production. Just the threat of an interruption in Chinese soybean orders sent commodity prices plunging and disrupted the family’s effort to sign contracts for next year’s crop.
Rippy farms land that has been in his mother’s family since 1848, when his ancestors settled at the intersection of three counties. The young farmer’s schoolteacher wife recently gave birth to Burkhart’s fourth grandchild.
The Rippys’ spartan, wood-paneled office is appointed with a pair of wooden desks and a worn plaid couch. A framed collection of Indian arrowheads unearthed by their plows adorns one wall.
Global issues have shadowed Rippy Farms since Ryan’s father, Howard, 61, raised his first crop in 1980, the year President Jimmy Carter imposed an embargo on grain sales to the Soviet Union following its invasion of Afghanistan.
That may explain why the elder Rippy is more sanguine about the tariff threat than his son. The wet, cold weather that has delayed the spring planting already had Ryan Rippy on edge before the tariff announcement.
His dad offers a reassuring perspective: The ex-businessman in the White House talks a tough game as part of a negotiating strategy. “I’m just not convinced that everything he’s threatened will happen,” Howard Rippy said.
Responding to cries of worry from farm-state Republicans, Trump last week ordered Agriculture Secretary Sonny Perdue to develop a plan to protect farmers from retaliation.
On Monday, the president repeated his promise of help, saying “farmers will be better off than they ever were” after enduring some short-term financial pain.
No one here is sure what that will mean, but some are wary of additional government intervention in their market, even if it’s designed to help them.
“If they do something for farmers, how fair is that to the retailers and the other industries?” Howard Rippy said.
Across the street from the Nucor mill, which has a giant American flag along one side, is the Ceres Solutions farmer cooperative, where Ryan Rippy and his dad purchase truckloads of fertilizer, fuel and seed.
The steelmaker last year sought Washington’s protection, complaining that state-subsidized Chinese mills are flooding global markets with low-priced steel, contributing to the loss of manufacturing jobs and the erosion of Nucor’s customer base.
“China in particular has been cheating for years,” said Ron Dickerson, who retired three years ago as general manager of the local plant. “The tariff is just a means to resolve the issue.”
Nucor maintains a no-layoffs policy, but inexpensive imports have cost domestic producers sales and reduced some of their output-linked pay.
“It has lowered production and clearly affected the teammates out there,” said Dickerson, referring to China.
Nucor selected Crawfordsville for the mill, one of its largest at 1.9 million square feet, in the late 1980s, drawn by the rural work ethic. About a decade later, Burkhart was hired by another steelmaker in Pittsboro, about 25 miles east.
His timing was unfortunate. In 1998, the Asian financial crisis unleashed a flood of cheap imported steel into the U.S. market, driving prices to their lowest point in 20 years. The effect upon domestic producers was “catastrophic,” according to a 2002 report by the U.S. trade representative.
More than two dozen steel companies declared bankruptcy, including Burkhart’s employer. The father of three was among those let go.
“With a wife and kids at home, that kind of hit hard,” he said. “We made do for a few years. I worked in different jobs to get by.”
Steel Dynamics outbid Nucor to acquire the bankrupt mill in 2002. By 2004, the new owners rehired Burkhart at his old plant. Business was good at first, but within a few years, the economy stumbled into the worst recession since the 1930s and his pay fluctuated.
“I probably had more bad years than good ones,” he said.
But steelmakers are now doing well financially. Nucor reported $1.3 billion in profits last year, its best performance since 2008. Steel Dynamics was profitable four of the past five years, and its $806 million profit last year was more than double what it earned one year earlier.
Burkhart is cheered by signs that Trump’s tariffs are spurring steel production. U.S. Steel and Republic Steel are reopening shuttered Midwestern mills in Illinois and Ohio. He likes that the president is making tough decisions and standing up to China.
“China has been putting the hurt to us for a long time. President Trump is fighting back, and China doesn’t like it,” he said, sitting in his Ford pickup as snowflakes swirled outside. “They don’t like the hurt being put back on them.”
Burkhart and his son-in-law struggle to make sense of the latest news from Washington. China’s violations of American intellectual property — the administration’s stated rationale for its latest tariff blast — is accepted here as fact.
But the intricacies of the matter are elusive, and many here, in a part of Indiana where Trump won nearly 76 percent of the 2016 vote, put their faith in the president’s claim of superior negotiating skills.
“I hope in these decisions, my family doesn’t suffer,” Burkhart said. “I’m hopeful this doesn’t turn into such a trade war it starts bankrupting companies and farmers and small businesses. I’m so hopeful that doesn’t happen.”