United States, Chad, President Trump discussed on The Indicator from Planet Money

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Season has begun politics coverage of what you might call widely varying quality is going to be everywhere for the next year and we'd indicator also acknowledged that politics does matter for what we cover for the economy in business and finance and money stuff because who gets elected can determine which canonic policies ended up being enacted. Obviously so we are not going to shy away from covering politics during the election cycle. And there's maybe no better guests to start doing this with our old friend. The economist Chad bound at the Peterson. Institute Chattanooga's co-authors Emily Blanchard and Davin shore have just finished a study trying to assess the potential affects of the trade war on last year's elections in the House of Representatives twenty eighteen election's that was when Democrats flipped forty seats there were previously held by Republicans. And we're going to speak with him about what that might tell us about the politics of Trade Chad. Welcome thanks for having me. The silly season never are really starts and stops. Actually now that I think about it right. It's just kind of there it is never ending. It's it's going on all the time that's absolutely right So Chad before the break what letting x just set up this paper force. What were you trying to analyze? Well back in in two thousand eighteen. We had to really big things that took place. The first obviously obviously for at least from my perspective was president trump's trade war so we had lots of American tariffs lots of retaliatory tariffs. We had the trump administration doling rolling out tens of billions of dollars in subsidies to the agricultural sector that was hurt by those tariffs and then of course we had the the twenty eighteen midterm elections. So the big question questioned the that we wanted to try to ask in an answer is was there any relationship between the two. Did the trade war have any impact whatsoever on on the flip from Republicans to Democrats in in the House of Representatives yet specifically those three parts of the trade war so first off the tariffs tariffs that the US put on goods that were being bought by Americans in American companies that came in from abroad. Second you said retaliatory tariffs Oh like when China saw hey the US putting on tariffs and we'll put some of our own on American products that are being bought by Chinese people And then third heard the US government gave subsidies to the agricultural sector to try to offset the damage of the trade war. Those three things right. That's exactly right. President Trump did tariffs arison steel aluminum solar panels washing machines and then two hundred fifty billion dollars worth of imports from China China Europe Europe Mexico Canada. A number of countries retaliated against American exports a lot of soybeans but but other farm products and other manufacturing exports as well into lots lots of Americans workers were potentially hurt by that and then the trump administration rolled out twelve billion dollars of subsidies to American farmers that it was concerned. Were being hurt by all that retaliation. That's what we're going to look at to see if we can trace an impact of those sorts of policies on the voting outcomes in the the twentieth election. Let's take a quick break and then we're back we're gonNA discuss what you and your co authors actually found support for. NPR comes from national car rental. The WHO wants you to know that with a membership in our complimentary Emerald Club you can skip the counter and choose any car in the aisle at participating national locations you can even even select an upgrade without paying extra learn more at national car dot com slash NPR. Everybody we've got Chad bound. He's joining us from Washington in DC. Chad let's start with this okay. You wanted to start by studying. The effects of US tariffs on goods that are imported from abroad rod into the US. How did that affect voting behaviour? So there's a number of ways in which tariffs which these taxes that are imposed on things that are produced another their countries can impact the US economy but the most direct way is through your job and so in principle if you are a worker and and you're employed by a company out there that competes with with stuff coming in from another country and all of a sudden president trump imposes tariffs on that thing whether it's steel will or aluminum or washing machines or just something else. We import from China. Now you face less competition from those products coming in and if you're a worker you potentially benefit from that reduction in in competition You may see wage increases and so in those particular instances. You might be more likely to to to vote for the Republican candidate in in your county or in your district In that two thousand eighteen election when we did our study though so we really didn't see any of that showing up in the data. There's really no discernible. Evidence that the workers that stood to benefit from president trump's tariffs were more likely to vote for Republicans in two thousand eighteen election. There were not more likely to vote for Republican. Because of those tariffs exactly there was no influence on their voting behavior okay and what about the retaliatory tariffs so other countries. Then see the American terrorist and say no hang on a second we're GONNA put tariffs of our own so presumably that might hurt American companies right exactly. So if you're an American working at Harley Davidson So the Europeans retaliated against them. Or you know your your soybean farmer pork farmer or you work for Levi's there were lots of products that trading partners retaliated over. We matched those up with a local employment across the United States and we did find evidence that if if you were more more likely to work in one of those industries that was exposed to the trading partner retaliation. You were actually less likely to vote for the Republican candidate in your in your account account your or your district in the twenty eighteen midterm election. Okay so that's sort of part two of the three things that you studied. par-three was interesting because because it involved the US government giving subsidies to farmers and to the agricultural sector in response to the retaliatory tariffs Chris by mainly China against. US farmers did those subsidies from the US government and up affecting voter behavior that we know of there is in fact some evidence that voters that that were receiving those subsidy payments from from the trump administration that were rolled out beginning in the summer of two thousand eighteen they were actually more likely to vote for Republicans in the in the two thousand eighteen election. the effect was small but it did have a bit of an offsetting effect on the fact that those also tended to be the county's areas that we're going to be the ones hurt by the the foreign retaliation when you say that the affect small do you mean that it was not enough to offset the potential loss of votes from the people who worked in counties that suffered from the retaliatory Tori tariffs. That's exactly right and partially that's because Those subsidies were were so geographically concentrated in terms of how they were dispersed I and they also tended to be dispersed in counties that were already very Republican in in terms of how traditionally voted And so at the margin region was really unlikely that that was going to flip any Any votes in in any significant manner. Okay so Chad. What are you wrap all this up for us? Then I mean when you look at these three findings what would be a good takeaway from this study. While the results that we found are relatively small and modest on average average across the United States there particularly important in the most competitive counties in in districts where the votes are close so we looked at in particular the counties that had been very close in the two thousand sixteen election and we see even bigger affects in those counties. And then when you when you add it all blop and we kind of do an exercise there to see how much of this swing of You know say forty votes in the twenty eighteen election toward the Democrats away from the Republicans. Republicans how much of those can be accounted for by the trade war We found that a that a pretty reasonable sized share of those so about fourteen percent of of the the flip can be attributed to the trade war chat down. Thanks for being back on the show man. Thanks for having me. This episode indicator was produced by Lena Sons. Geary fact check by Nadia Nadia Lewis. Our Editors Patty Hirsch in indicator is a production of NPR.

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