Protectionism under Trump: Policy, Identity, and Anxiety

July 2, 2019 2:15 PM

The 2016 presidential campaign of Republican candidate Donald J. Trump departed from a broad US consensus supporting open international trade policies with its emphasis on limits to immigration and international trade. Two explanations have been offered to explain Trump’s electoral success in embracing this shift. One emphasizes economic anxiety and the other emphasizes white voters’ distress over status loss, both as the dominant group at home and in America’s standing abroad.

My new Working Paper entitled Protectionism Under Trump: The China Shock, Intolerance, and the “First White President” uses US county-level electoral data to examine the power of these competing explanations. In this paper, the idea that the turn to protectionism was purely a response to globalization is rejected. Exposure to trade competition encouraged a shift to the Republican candidate, but this effect is mediated by race, diversity, education, and age. Economics, in other words, may not be the most important driver. Such effects were particularly acute in swing states.

The consensus challenged by Trump has held in US politics for three generations. It solidified after World War II, when policymakers looking back at the debacle of the Smoot-Hawley tariff in the 1930s and the Great Depression that followed were determined to support open international trade policies to prevent a recurrence of war and economic crises. Survey data suggest that changes in the underlying attitudes of a substantial number of American voters mirrored this shift toward the explicitly nationalist and protectionist positions offered by Trump, who swept to the White House based on these principles (despite Trump losing the popular vote).

To a significant extent, President Trump has delivered on his campaign promises, pulling out of the Trans-Pacific Partnership initiative and through renegotiations, pushing the North American Free Trade Agreement and the Korea-US Free Trade Agreement toward less openness. He imposed protection in steel and aluminum via a national security case (Section 232 of the Trade Expansion Act of 1962), started a trade war with China, and has threatened trade relations with other partners via a pending Section 232 case on trade in automobiles and parts. Applied protection has skyrocketed, and a growing share of US exports is subject to retaliation.

Many analysts of the current situation trace his success to economic distress due to enhanced import competition (sometimes attributed specifically to competition from China) as a major factor persuading voters to turn to protectionism, particularly white male voters in areas with high levels of manufacturing employment.

But survey evidence suggests that the shift in preferences toward protectionism, and the likelihood of voting for Trump as the protectionist candidate, was uncorrelated with household economic distress or perceptions about the impact of international trade on household economic well-being. Instead, attitudes were correlated with voter perceptions of American global dominance and the group position of whites domestically.

Moreover, considerable evidence indicates that attitudes toward international trade and domestic minorities are not separable. From this perspective, 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.

What cannot be assessed is if white anxiety is a purely cultural phenomenon: The survey evidence demonstrating the interactions of personal attitudes toward trade and out-groups confounds parsing that issue via aggregate data, as are used in the paper. The finding that increased ethnic diversity is a statistically significant correlate with the 2012–16 election results but not the 2000–2016 results could be interpreted as supportive of the “cultural backlash” hypothesis, either in the narrow sense that the 2016 election result was a reaction to the presidency of Barack Obama or in the broader sense that economic anxiety following the global financial crisis and intensified international trade competition contributed to heightened social intolerance, or both.

This is a sobering result. If economic distress solely drove the shift toward protectionism, then policy intervention could ameliorate the negative impact of trade on segments of the population and support a return to open trade policies. However, if at base the outcome of the 2016 election was an expression of white anxiety over loss of status and political control, captured memorably by Ta-nehisi Coates’s characterization of Donald Trump as “the first white president,” then it is hard to envision a constructive policy response to such concerns.