American farmer sentiment has plunged to levels not seen since October 2016, the month before Donald Trump’s election victory, as the U.S.-China trade war drags on.

The Purdue University/CME Group’s agricultural sentiment index fell to 101 points in May from 115 in April. The gauge is based on a survey of 400 agricultural producers. The declines “effectively erased all of the large improvement in farmer sentiment that took place following the November 2016 election,” the researchers said in a statement Tuesday.

The index, a measure of perspectives on current and future economic conditions, plummeted a fourth straight month. China’s retaliatory tariffs on U.S. farm goods have dented agriculture incomes and disrupted global trade flows. Meanwhile, a torrent of bad weather so far this year has devastated Midwest croplands and delayed planting.

Farmers comprise the bedrock of the rural base that catapulted Trump to the White House. On May 23, the U.S. Department of Agriculture announced a second farm assistance program with a pledge of $16 billion to help growers stung by the president’s trade spat with China. The administration rolled out a similar program last year.

Still, the aid package faced a muted response. Farmers have said they’d prefer a resumption of normal trade over government handouts. Several farm-state lawmakers say the payments are too meager. And the money risks distorting agriculture markets.

In May, 18% of farmers said it was a “good time” to make large farm investments, while 81% stated it was a “bad time,” lowering the investment index to the lowest reading since data tracking began in October 2015, the Purdue/CME survey showed.

“Farmers are facing tough decisions in the midst of a wet planting season and a lot of uncertainty surrounding trade discussions,” James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, said in the statement.

Trump is also now proposing 5% tariffs against Mexico as talks over immigration continue with the country. Retaliation by Mexico is virtually certain to once again strike Trump’s political base.

 


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