Is Trump right about free trade? We asked an expert
Donald Trump ran for the presidency on a chaotic cocktail of issues: xenophobia and anti-immigrant sentiment, a rejection of the political class embodied by Hillary Clinton, and doses of nostalgia for the bygone glory days of U.S. manufacturing. And possibly most important to his victory, he served up heaping portions of anti-trade rhetoric directed at both the North American Free Trade Agreement and Barack Obama’s now dead Trans-Pacific Partnership.
Trump wasn’t the only presidential campaign upstart who saw anti-trade sentiment as a rich vein to mine for potential votes. Vermont Sen. Bernie Sanders’ improbable bid for the Democratic nomination was also fueled in part by negative feelings about trade. And it’s no secret why.
A recent Bureau of Economic Research paper has confirmed what communities hard hit by globalization have known for years: that American industrial areas particularly exposed to the consequences of Chinese trade have suffered — and continue to suffer — high unemployment and sharp declines in earnings.
“The effects are very concentrated and very visible locally,” said MIT economist David Autor, one of the authors of the paper, which has prompted a rethink about the long-standing conventional wisdom that the benefits of trade almost always outweigh the costs.
In his new book, “Failure to Adjust,” Edward Alden makes the case that while trade has brought enormous benefits to the U.S. economy — and particularly to U.S. multinational corporations — it has also produced significant pain in the form of job losses and dislocation for communities around the country.
The failure of the U.S. political system to find ways to cushion those blows explains why Trump’s anti-trade stance proved so alluring to voters. So was Trump right? Has free trade been a bad deal for the U.S.? We asked Alden to tell us more on a Random Walk, our intermittent series of discussions on economics.