The election did not turn out as pollsters projected. The closer-than-expected margins in the presidential race and a nearly evenly split Congress was not expected prior to Nov. 3. The outcome changes the landscape, especially for ag issues.
Rural Votes Pushed Back Against the 2018 “Blue Wave”
Political pundits expected the “blue wave” from the 2018 midterm elections to continue, giving democrats control of the White House, House and Senate. Rural voters who turned out for Donald Trump reversed that wave in 2020, giving republicans gains in the House, likely maintaining a slight edge in the Senate and producing republican gains in state races, according to Karla Thieman of The Russell Group, a food and agriculture focused government affairs firm.
“The 2018 wave did not last this time, and the reason they weren’t able to get re-elected is in large part, at least based on the data I’ve seen, due to the number of rural voters who turned out for Donald Trump this time,” Thieman says.
Tax Fears Mitigated For Farmers
As a candidate, Joe Biden put forward a tax plan that would have removed exemptions for the estate tax and ended stepped up basis when assets are transferred at death. A republican-controlled or an evenly split Senate greatly reduces the likelihood those tax changes will be put forward.
“From a tax perspective I think that’s the best result we can have,” says Paul Neiffer, CPA and partner with CLA. “We have a very tight margin in the House and still a slightly republican Senate. I’m not too worried about farmers having a big increase in taxes, at least for the next couple of years.”
Biden Administration Will Push Forward on China
The Biden administration is already signaling it will press China to enforce the phase-one trade agreement and expand the deal to address issues such as protection of intellectual property. Delaware Agriculture Secretary Michael Scuse, who has worked closely with Biden on ag issues for decades, expects Biden to keep tariffs in place but work to reduce trade volatility.
“The President-elect understands 20% of agricultural income is directly related to trade,” he says.
Scuse expects the new administration to enforce the phase-one agreement so U.S. exports to China can exceed previous levels of around $25 billion and hit $35 billion to $40 billion.
