Donald Trump’s Trade Wars Are Giving Voters Actual Economic Anxiety
A plurality of voters disapprove of Trump’s strategy on trade for very clear and pragmatic reasons. And those that don’t, will soon see its effects.
Half of Americans approve of how the economy is going but only about a third are happy with where it may be headed, according to the latest NBC/WSJ poll. As President Trump keeps ramping up trade wars opposed by virtually every economist as a result of his advisers’ highly unorthodox views on the global economy, his approval on the issue is sinking. Despite loyal Trump voters supporting his strategy as their wallets take direct hits, 45% of those surveyed disapprove, while 17% were neutral. This makes sense as a quarter of American GDP depends directly on trade with other nations, especially in states bordering oceans, Canada, and Mexico.
An additional headache for Trump and the GOP is that the five states most dependent on trade are either all deep red or newly Republican-leaning. This is on top of the party shrinking in both the short and long-term, and retaliatory tariffs from our traditional trading partners surgically targeting Trump voters. So as profit margins for farmers, manufacturers, and bourbon makers shrink and job losses escalate, the GOP may be facing even less support among the electorate, and low approval on trade issues could translate into lowering approval on the economy, the one issue still carrying the day for Trump. Unfortunately, the message from Republican lawmakers on trade wars right now amounts to telling voters to tighten their belts so their leaders can defeat the Chinese economic menace.
Trump also does not seem to understand the fallout of his trade wars, arguing that due to the stock market’s rise in value since the 2016 election “we’re playing with the bank’s money” in waging them. But the value of the stock market is not a cash reserve companies can tap to ride out disruptions in their supply chains and artificial markups on their goods, it’s a barometer of how the investor class feels about the direction of America’s larger companies, and it would likely trail manifestations of real problems on the ground. Just before the Great Recession, the market seemed slow but stable until the bottom fell out as the subprime crisis finally exploded out of the boardrooms and into the headlines.
Currently, the market is slowing its growth and although the conditions signaling a recession aren’t there, hampering trade while sabotaging booming sectors through large artificial subsidies, and gratuitous deregulation of the fossil fuel industry as well as killing net neutrality for the benefit of oligopolistic telecoms over tech companies, hardly seem like steps one takes to keep a healthy economy humming. Unfortunately, the Trump administration is personally invested in trying to turn the economic clock back to the 1950s despite this being an impossible and self-sabotaging task, and voters are beginning to take notice.