When it comes to tariffs and trade - a few campaign rules apply:
1) Where you sit is where you stand
2) Good politics rarely makes good economics
3) China, Brazil, France, Germany, Canada et al. don't have a vote in US elections
4) House elections are more parochial and micro, while Senate elections are broad-minded and macro
Earlier this week, Morning Consult reported thirty-eight percent of registered voters surveyed in the poll said tariffs on Chinese imports would help the US economy, compared to 42 percent who think they’ll hurt the economy.
In a change of Republican ideology, Republican voters now are more likely to say the tariffs are good for the economy, with 59 percent saying they think they help the United States compared to 36 percent of independents and 21 percent of Democrats.
Regardless of what happens in the coming weeks, trade and tariffs will be an issue on the campaign trail in 2018 and 2020.
The battle between helping some against maximizing for all is the friction point.
Berlin and Beijing know this Amerian political struggle. No doubt teams of political scientists around the world are reading Politico, The Hill, and the Cook Report to determine where tit for tat tariffs will inflict the most pain at the ballot box for Republicans and Trump.
Jamian Ronca Spadavecchia, managing director at the consulting firm Oxbow Advisory and an adjunct professor at Middlebury College, said that the political risks for the administration are likely to be higher if US tariffs contribute to widespread inflation of consumer prices. “The strategy from the other side, whether it’s China or another country, to focus on congressional districts or agricultural products — I don’t know if that’s going to be that effective,” Spadavecchia said in an interview on Tuesday. “China is a big market, but it’s not our only market.”
Sure the tariffs provide a feel-good and sterling campaign trail talking point, but what is the end game?
It is to change business behavior and global commerce imbalances, or is politics for the sake of politics?
“This is not about a policy,” said Mickey Kantor, the former commerce secretary and a chief trade negotiator for the Clinton administration, in a New York Times article. “This is not about asserting US leadership. It’s about the president having an impulse that if he does this, he will strengthen his base, send a signal to China, and be able to say he’s been strong and tough.”
The expansion of tit for tat tariffs and reduced international commerce will stunt economic growth. Industries that require global supply chains and cross-border intercompany assembly will be profoundly affected, and pain could be substantial.
Economists say the tariffs will drive up prices for American consumers purchasing products at retail stores as well as for businesses that depend on China for parts used to make other goods in the United States.
This increase in costs and losing markets is generating local headlines, but the feel-good, standing strong policy (personality) of Team Trump will keep trade and tariffs on the campaign trail in 2018 and 2020.
Plan accordingly.
-Marc A. Ross
Marc A. Ross specializes in global communications, thought leader management, and event production at the intersection of international politics, policy, and profits. Working with senior executives from multinational corporations, trade associations, and disruptive startups, Marc helps business leaders navigate globalization, disruption, and American politics.
