Opinion: End trade war on blue-collar America
Just over 10,000 votes made Donald Trump the first Republican presidential candidate to win Michigan since 1988, a swing generally attributed to his appeal to the state’s blue-collar workers. His America-first, pro-manufacturing messaging played well for a population still struggling after the Great Recession, but the results are in. Protectionist policy is still destructive for the working class, and it could cost Trump some of his most important voters in 2020.
In an otherwise humming economy, the president’s trade war with China has prevented the creation of 300,000 jobs and slowed GDP growth by 0.3 percentage points, according to Moody’s Analytics. These numbers don’t even account for Trump’s new tariffs on $7.5 billion worth of goods from major European allies that took effect October 18, and those countries have already announced retaliatory tariffs against us.
The recent trade talks with China don’t offer much hope. Negotiations are dragging on longer than the Trump administration anticipated, and China still has bargaining chips to hold over the U.S. “Progress” thus far is trivial compared to the damage of the trade war has wrought.
Most of those losses are concentrated around blue-collar workers in manufacturing and agriculture. Trump’s 25% tax on steel, for example, raised costs for American manufacturers who use steel to make other products, such as cars. And steel-using manufacturers far outnumber steel manufacturers –– over 46 to 1 in 2018. For every blue-collar worker that the steel tariff subsidized, it threatened 50.
Manufacturing growth has hit a three-year low, and per-month job growth in 2019 is just a third of what it was in 2018.
The steel industry is struggling. Market share prices have been declining since the initial surge last summer, mainly because steel-using manufacturers are buying even less steel than initially estimated.
After China severely cut imports of U.S. agricultural goods, particularly soybeans, the Trump administration tried softening the trade war’s blow to farmers by giving farmers $12 billion in 2018 and $16 billion in 2019, for a whopping total of $28 billion. This more than doubles President Obama’s 2009 auto industry bailout. The irony, of course, is difficult to overlook. Trump criticized Obama’s auto bailout, but Trump’s bailout is bigger — and a poor attempt to solve a problem he created.
It’s the heart of Trump country that’s really feeling the heat from this economic fumble — Indiana, Wisconsin, Michigan, Iowa, and Alabama are the states with the five highest shares of manufacturing employment.
For Democrats with an eye on the Oval Office, a promise to reinvigorate trade could be the low-hanging fruit needed to win back swing states. Candidates could pledge to re-enter the Trans-Pacific Partnership, which would expand America’s access to overseas markets. Trump-like promises of toughness and negotiations should be replaced with openness and prosperity for the whole country.
No matter who’s in office, if the trade war continues through next year, economic growth will be well below its historic average, causing the U.S. to miss out on another 450,000 jobs in 2020.
Far from being “good and easy to win,” Trump’s trade war was lost before it began. It’s time for the U.S. to kick aside this fruitless trade policy and open up shop once more.
John Kristof is a contributor for Young Voices.