Why Americans Aren’t Nearly as Protectionist as Election Rhetoric Suggests
A popular but wildly incorrect narrative has taken hold during the 2016 election cycle—that both candidates’ anti-trade rhetoric is the product of a mass revolt against free trade agreements. As appealing as this story might be, it is also completely wrong. My just-released Policy Brief from the Peterson Institute for International Economics helps shed light on why this fictional tale has taken on a life of its own. In this post, I take on some of the red herring explanations for the protectionist turn and forward three more plausible alternatives. In a second, I’ll talk about what this all means for the future of trade policy in the United States.
Trade policy discussions in the United States have a decidedly “best of times, worst of times” flavor at the moment. Polls indicate that a majority of Americans—the largest since 2000—believes trade is an opportunity for economic growth; poll respondents also believe free trade agreements (FTAs) are a good thing for the United States. At the same time, US presidential politics have taken a decidedly protectionist turn. Both the Democratic and Republican candidates for president—Hillary Clinton and Donald Trump—have come out against the Trans-Pacific Partnership (TPP), and Trump has pushed even further with threats to pull the United States out of the North American Free Trade Agreement (NAFTA) and slap large tariffs on Chinese goods. As former agricultural secretary Dan Glickman recently argued, “The ground underneath the decades old bipartisan consensus on free trade policy seems to be crumbling.”
The Policy Brief, Protectionism in the 2016 Election: Causes and Consequences, Truths and Fictions,Protectionism and Its Consequences, asks one simple question: How did we get here? First, two common explanations can be dispelled: (1) that free trade is popular with elites but not with masses, and (2) that younger voters are pushing the election in a more protectionist direction. Instead, there are three more plausible forces at work: (1) the effects of the China shock finally sinking in, (2) protectionist sentiment in battleground states, and (3) the increasing complexity of free trade deals like the TPP.
Two Common Explanations Are Red Herrings
- Free trade is popular with elites but not the masses. This has been a consistent refrain during the 2016 election. But if the US electorate at large is as protectionist as is commonly stated, it is not evident in survey data. According to Gallup polling, since the 1990s majorities have viewed trade more as an opportunity for economic growth than a threat. Opinion reversed in the mid-2000s and bottomed out at the height of the global financial crisis and concomitant steep recession. Since 2013, however, trade has been viewed more positively than even during the economic expansion of the 1990s. These data are consistent with data on support for free trade agreements.
- Younger voters are more protectionist than older voters. Bernie Sanders and Trump both did better with younger voters during the primaries than the more pro–free trade (or at least less protectionist) Hillary Clinton, leading many to assume that younger voters were partial to more protectionist policy stances. The problem with this narrative is that the data do not support it. Young people are much more pro–free trade and more likely to believe they have benefitted from trade and FTAs than any other generation—even controlling for education, income, gender, ethnicity, and other factors. That might affect perceptions about their personal benefits from trade. In the main, younger voters are not clamoring for a return to more protectionist policies.
Three Plausible Explanations
- The China shock, post–financial crisis. One culprit is the China shock—the unprecedented manufacturing-driven rise of the Chinese economy, which displaced as many as 2.0 to 2.4 million US jobs as a result of imports from China. China’s post-WTO ascension in world markets widened the US trade deficit while contributing to wage stagnation and job losses in manufacturing. But since the China shock peaked in 2007, why didn’t we hear more about it in the 2008 and 2012 elections? The financial crisis sucked all of the air for a trade-related discussion out of the room, with attention turning to financial regulation (in 2008) and President Barack Obama’s stimulus (2012). Only as the financial crisis gave way to a slow recovery has the China shock—and the longer-term effects of technological change—put trade and employment front and center. Economically, the China shock is behind us. Its electoral consequences may not be.
- Protectionist sentiment in battleground states. Free trade may be better policy, but protectionism plays better on the campaign trail—and the US electoral map amplifies this tendency. The action in US presidential elections inevitably boils down to a handful of battleground states—and these states are more skeptical of FTAs than their less electorally competitive counterparts. In the 11 battleground states (Colorado, Florida, Iowa, Michigan, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, Virginia, and Wisconsin), the pattern is striking. In only one (Colorado, with 9 electoral votes) did a weighted proportion of survey respondents report that free trade had definitely or probably helped them or their family. In the remaining 10 (which together hold 137 electoral votes), the proportions agreeing with the statement ranged from 25 percent in Michigan to 27 percent in Ohio and 48 percent in Virginia. Facing this electoral map, it is easy to understand why presidential candidates would temper their pro-trade positions in order to court votes in more protectionist battleground states.
- Trade deals have become increasingly complex. Creating the architecture for a free trade system—not just tariff and quota reductions, but harmonization of standards and dispute resolution mechanisms—has grown more complex. The text of the Israel-US FTA (1985) totals roughly 7,500 words; the TPP, inclusive of annexes and schedules, runs roughly 2 million words—an astonishing 266 times longer. The increase in complexity is necessary to address nontariff barriers to trade, facilitate complex global supply chains, and, some would argue, satisfy special interests in signatory countries. However, it also has provided ammunition for an anti-FTA coalition—harmonizing standards in these areas necessarily infringes on each country’s sovereign autonomy to craft domestic policy, stoking concerns of a regulatory race to the bottom. Americans may view free trade and FTAs positively in the aggregate while being skeptical of particular FTAs—like the TPP—even if such agreements largely reflect US economic interests and are modeled on previous US trade agreements.
In sum, the protectionist turn in the 2016 US presidential election is neither the result of a sea change in trade-related public opinion nor an anti-trade youth in revolt. It is intimately tied to the interaction between attitudes toward trade and the peculiarities of the US electoral system, the tendency to make FTAs ever more encompassing, and government spending and compensatory policies that have not kept up with technological and trade shocks to the US employment landscape.
In part two, I’ll discuss my broad view of the context in which this discussion has taken place: US public opinion is not, on the whole, anti–free trade. It appears, however, to be near a turning point regarding how to address the pain that has come with it.