Trump North Dakota rally: A look at state's economy amid trade conflict

President Donald Trump is set to speak at a rally on behalf of North Dakota Rep. Kevin Cramer on Wednesday amid concerns about an escalating trade conflict with China and as the state’s economy trails behind those of other Midwestern states, according to a leading economic survey.

Creighton University’s Mid-America Business Conditions Index, which measures economic data for the nine states stretching from Arkansas to North Dakota, gave the state a rating of 62.4 out of 100 in its May survey. That number, while robust, ranked last among the nine states included in the survey, and fell behind the region’s overall rating of 67.3.

“North Dakota ranked fifth among the nine states in the region in terms of the rate of overall manufacturing growth over the past 12 months,” Creighton University economist Ernie Goss said in the May report.

The survey was conducted before the Trump administration announced tariffs on steel and aluminum imports. China, Canada and the European Union responded with retaliatory duties on U.S. goods, sparking concerns among economists about an escalating trade conflict.

The tariffs are expected to be just one element of Trump’s agenda when he addresses the crowd in Fargo, North Dakota, on Wednesday night. Trump will speak hours after Supreme Court Justice Anthony Kennedy announced his retirement, and amid a continued debate over his administration’s immigration policy.

Cramer is attempting to unseat incumbent Democratic Sen. Heidi Heitkamp. Trump easily carried North Dakota during the 2016 presidential election, winning the state by 36 percentage points.

While the Mid-America Business Conditions Index focuses on the manufacturing sector, tariffs are seen as a potential threat to North Dakota’s agriculture industry, which is largely dependent on exports, according to the Wall Street Journal. China imposed a 25% tariff on soybeans, the state’s top export.

“I don’t like tariffs but I don’t think it’s appropriate to undercut the authority of the president,” Cramer told the Journal.

The nine states included in Creighton’s analysis received their highest rating in 14 years, which indicates “strong growth for the next three to six months,” according to the report. However, wholesale inflation also reached its highest level in seven years and employers are contending with a labor shortage and lack of qualified workers for job openings.

“Healthy profit growth, still low interest rates, and lower tax rates, pushed business confidence into a range indicating robust confidence,” Goss said of the nine-state region.

The region has yet to see the full impact of Trump’s tariffs, according to Goss.

“The Goldilocks economy, not too hot, not too cold, will be tested in the months ahead as trade skirmishes and potential wars slow growth and contribute to higher prices for inputs such as steel and aluminum. These higher prices will slow growth and push the Federal Reserve to be more aggressive in raising interest rates in the weeks and months ahead,” he said.