Donald Trump’s surprise election victory, the president likes to say, had a lot to do with taking a stance on trade and economic policy well outside the Republican mainstream, arguing for using tariffs to keep foreign goods out of the US and build up industries at home.
“We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength,” Trump declared in his inaugural address.
But was his appeal to voters on trade, especially in the Upper Midwest, separate from his more baldly inflammatory arguments on immigration and refugees? Or was it all wrapped up into one overall message that appealed not so much to people’s economic circumstances but instead to their anxiety over their place in the American and global power structure?
This question is not just important for figuring out why Trump won in 2016 and if he’ll win again in 2020, but also for figuring out how people think about trade policy. This is of special concern to Marcus Noland, the director of studies at the Peterson Institute for International Economics, one of Washington’s most respected economic think tanks and a bastion of, as he puts it, the “pro-globalization liberal, rule-based order consensus” that Trump had so disrupted.
So after the election, Noland started doing work that looks less like trade policy and more like political science, looking at the factors that helped determine support for Trump on a local level. He found, he writes in a new paper, that the backlash to more free trade was not spread evenly around those affected by it or who were made worse off. Instead, the turn towards protectionism was associated with the views, largely held by white people, about America’s perceived decline in global position and the status of whites within America.
The negative reaction to the rising tide of globalization “is particularly intense among some communities, low-education whites and older whites,” that “diversity in and of itself seems to be provoking and intensifying these reactions,” he told Vox.
This is not to say that Trump’s trade message didn’t matter or was inconsistent with his broader anti-immigration message that appealed to white voters anxious about rising levels of demographic change.
Instead, Noland writes, “considerable evidence indicates that attitudes toward international trade and domestic minorities are not separable … the Trump campaign’s articulation of protectionist positions and the use of racially charged, anti-immigrant, and Islamophobic political language amounted to a self-reinforcing package.”
His research suggests that the trade portion of the Trump message can’t be isolated and neutralized by his opponents.
From the perspective of those who believe in this old trade consensus, it raises serious questions about the typical remedies for helping out the so-called “losers” from more trade: financial, educational, and workforce training assistance. While these programs could even out the fall in living standards that new trade arrangements can induce for some, it may do little to rebuild the political coalition around trade policy.
It also comes at a time when mainstream economists have paid more attention to the domestic downside from increased trade integration. One of the most important pieces of research was the identification of the so-called “China shock.” Researchers identified a set of related social issues that followed China’s entry to the World Trade Organization in 2001 and its increased manufacturing exports to the United States. These included everything from lower employment in manufacturing that competed with Chinese imports to an uptick in welfare programs, and even lower rates of household formation.
The shifts weren’t just in the lives of those affected by China’s increased exporting prowess, but also in their politics — the areas affected by the China shock tended to end up with more extreme Republican politics that may have, per David Autor, the main author behind the research, been “enough to swing several swing states” in the 2016 election.
Noland cites research showing that between 2000 and 2010, “productivity change accounted for 88 percent of the job losses,” while the shift toward protectionist views and the preference for Trump “was uncorrelated with household economic distress or perceptions about the impact of international trade on household economic well-being.” Protectionist ideas were, instead, “correlated with voter perceptions of American global dominance and the group position of whites domestically.”
One way of separating out the effects of trade policy and overall cultural and demographic anxieties is to look at what happens over time, especially before and after the election of Barack Obama.
After all, the China shock did not start in 2008 or 2012; it started at the beginning of the 21st century, and lasted through the entire Bush administration. Norland finds that racial diversity of an area become more associated with “a shift toward the Republican candidate” between 2012 and 2016 as opposed to between 2000 and 2016.
“Diversity in and of itself seems to be proving and intensifying these reactions, and that occurs for the post-Obama cycle but not the longer cycle,” Noland told Vox. Thus, you find something rare for a working paper from an economics think tank: a citation to Ta-Nehisi Coates’s essay describing Trump as the “first white president.”
While these results have an obvious attraction for the pro-trade, pro-globalization, pro-liberal, rules-based worldview articulated by institutions like Peterson, there’s a dark side to them as well, suggesting that the political backlash to open trade policies cannot be easily fixed with policy adjustments.
“If it were just trade, then you would come up with technocratic worker adjustment solutions that would ameliorate these problems and reestablish some kind of consensus for open trade, which is a desirable thing overall, although some have been disadvantaged by developments,” Noland said. “This may not be the whole story. You can do all the trade adjustment assistance you want — it won’t address the underlying anxieties and concerns.”