Trump's tariffs are hurting American jobs but have swayed American voters, a study says

The sweeping tariffs that former President Donald J. Trump imposed on China and other U.S. trading partners were simultaneously a political success and an economic failure, a new study suggests. That's because the tariffs won over voters to the Republican Party, even though they didn't bring back jobs.

The impartial working paper examines monthly data on U.S. employment by industry to find that tariffs imposed by Mr. Trump on foreign metals, washing machines and a range of goods from China starting in 2018 have not increased or decreased the overall number of jobs in the affected industries.

But the tariffs have prompted other countries to impose their own retaliatory tariffs on American products, making them more expensive to sell abroad. These tariffs had a negative effect on American employment, the newspaper found. This was especially true in agriculture: farmers exporting soybeans, cotton and sorghum to China were hit by Beijing's decision to raise tariffs on those products to as much as 25 percent.

The Trump administration tried to offset these losses by providing financial support to farmers, ultimately spending $23 billion in 2018 and 2019. But those funds were unevenly distributed. found a government assessmentand economists say these subsidies have only partially mitigated the damage caused by the tariffs.

The findings contradict Trump's claims that his tariffs have helped undo some of the damage done by competition from China and bring back American manufacturing jobs that had gone abroad. The economists conclude that the overall effect on U.S. employment of the three measures — the initial tariffs, retaliatory tariffs and subsidies to farmers — “was a wash at best, and possibly slightly negative.”

“You can certainly reject the hypothesis that this tariff policy was very successful in bringing jobs back to those industries that were heavily affected by that tariff war,” said one of the study's authors, David Dorn of the University of Zurich, in a article. interview.

Still, the researchers' work suggests that aggressive tariffs on foreign products were a political success for Trump and the Republican Party.

Based on voter turnout data for presidential and congressional elections, the study suggests that people living in areas affected by the tariffs — particularly the Midwest, the Great Lakes region and the South — are more likely to vote to Mr. Trump in 2020. According to the paper, they are also less likely to identify as Democrats and more likely to elect Republicans to Congress.

These political beliefs were not entirely immune to economic effects: Republican electoral gains were stronger in locations where tariffs and subsidies had a more positive effect on the labor market. And the retaliatory tariffs imposed by other countries in response to Trump's tariffs have weakened support for Republicans, but only modestly, the newspaper said.

Still, the economists speculate that voters in areas hit hard by economic competition from China in recent decades may have valued the tariffs “as a sign of political solidarity,” rather than for the actual impact they had on employment.

“People respond very positively, positively from a Republican point of view, to import protection for their local industry,” Mr. Dorn said, “but they don't punish Republicans as severely if their location is exposed to retaliatory tariffs.”

In addition to Mr. Dorn, the study's authors are David Autor of the Massachusetts Institute of Technology, Anne Beck of the World Bank and Gordon H. Hanson of the Harvard Kennedy School.

Mr. Autor, Mr. Dorn and Mr. Hanson have done influential research on “the Chinese shock”, which quantified how much China's entry into the World Trade Organization had reduced employment in US manufacturing. Their later work examined how these job losses have affected political trends in the US heartland, including leading to political polarization and increased Republican support.

Mr. Dorn said the U.S. economy grew strongly during the trade war, which may have influenced voters' perceptions of the effects of tariffs. “It's the famous: 'It's the economy, stupid,'” he said.

“It's very, very difficult for people to fully understand why the economy is doing well,” Mr. Dorn added. “Is the economy doing well thanks to a certain government policy, or is the economy doing well despite government policy?”

The findings come as Mr. Trump promises even more aggressive trade measures as a candidate in 2024. Mr. Trump has declared his previous tariffs a success and proposed to enact an even more extensive program of tariffs if re-elected, including a 10 percent levy. “basic rate” for all imported goods.

Both Democrats and Republicans have shown greater willingness in recent years to embrace protections for U.S. industry, after decades in which trade expanded rapidly, supply chains globalized and many U.S. factories moved abroad.

While Mr. Biden has reduced some of the tariffs that Mr. Trump put in place, such as those on Europe, he has kept in place Chinese tariffs and other measures. Biden administration officials are also debating whether to further increase tariffs on some strategic products, such as electric vehicles.

Advocates argue that tariffs will prevent China from flooding the United States with cheap goods, protecting vulnerable American manufacturing industries and generating revenue for the federal government.

Critics say tariffs simply raise prices for American consumers and place a particular burden on lower-income people who spend a greater share of their money on goods. Tariffs also increase costs for U.S. factories that rely on foreign inputs, which can make U.S. products more expensive and less competitive internationally.

During Trump's term, the average U.S. tariff on Chinese goods rose from 3.1 percent to 21 percent within just two years, while the average Chinese tariff on U.S. goods rose from 8 percent to 21.8 percent, the study said.

The study's authors say it's not clear exactly why tariffs haven't led to more U.S. jobs. One possibility is that companies simply imported products from other countries with lower costs, rather than from China, a trend visible in trade data.

In some cases, Mr. Dorn said, American industries that received import protection ended up with higher sales; One possibility is that American companies discovered they could raise prices after tariffs were imposed without increasing production.

It remains an open question whether tariffs that failed to deliver substantial job gains during the trade war could create more jobs in the longer term, the paper said.