A stunning new Wall Street Journal-NBC News Poll portends a sea-change in U.S. trade policy. According to John Harwood in today’s Wall Street Journal:
Six in 10 Republicans in the poll agreed with the statement that free trade has been bad for the U.S. and said they would agree with a Republican candidate who favored tougher regulations to limit foreign imports.
This makes Matthew Slaughter and Kenneth Scheve’s prediction in Foreign Affairs look even more prescient. This summer they wrote:
U.S. policy is becoming more protectionist because the American public is becoming more protectionist and this shift in attitudes is a result of stagnant or falling incomes. Public support for engagement with the world economy is strongly linked to labor-market performance, and for most workers labor-market performance has been poor.
All of this should be of concern because, as Slaughter recently told Policy Innovations, globalization adds between $500 billion and $1 trillion to annual US income.
The leading Republican candidates for president are all still solidly pro-trade. Will they begin to change their tune in light of this emerging trend among the party base? And what about the Democrats? The new poll claims that a majority of Democrat voters believe that free-trade hurts the US. Hillary Clinton is looking less and less like her free-trading husband. She recently opposed the US-South Korea free trade pact. Will the trading stance of a Clinton presidency look more like the 1990s or the 1930s?
More to the point, if both parties start sounding the protectionist horn, what effect will that have on US incomes and growth rates around the world? Are we headed for a return to the disastrous Smoot-Hawley era of the 1930s?
Say it aint so.
- Matthew Hennessey