A new poll suggests that Republicans believe that free trade has been bad for the United States by a wide margin:
WASHINGTON — By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.
The sign of broadening resistance to globalization came in a new Wall Street Journal-NBC News Poll that showed a fraying of Republican Party orthodoxy on the economy. While 60% of respondents said they want the next president and Congress to continue cutting taxes, 32% said it’s time for some tax increases on the wealthiest Americans to reduce the budget deficit and pay for health care.
Six in 10 Republicans in the poll agreed with a 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. That represents a challenge for Republican candidates who generally echo Mr. Bush’s calls for continued trade expansion, and reflects a substantial shift in sentiment from eight years ago.
Several of the prior entries in my “Isolationism Watch” series have shown Democrats moving against free trade, generally expressing their preference for “Fair Trade” i.e. not free trade.
Does free trade have a constituency in the United States anymore? What in the world are people thinking?
I don’t doubt the trend toward isolationism, but I believe I’ve seen polls showing that most Americans believe that free trade has been bad for the economy, but is good in the long run, or that free trade has hurt some workers, but not themselves. The WSJ poll essentially asks which of two options better reflects your view, forcing divisions in a case where views might be mixed. And the specific reference to product safety given recent news, might be significant too.
Does free trade have a constituency in the United States anymore?
Yes. It consists (roughly) of you, me, and the Tri-lateral Commision.
What in the world are people thinking?
They’re not. They’re too distracted by Larry Craig’s “wide stance”, and are frankly flummoxed that Britney Spears seems to have another hit song. Who listens to that stuff?
/ cheapos
More seriously, I think that PD Shaw is definitely on the right track here. And on the larger front, Americans are probably just getting sick and tired of the outside world in a general sense. Said world frankly makes no sense at all. (Neither does America, but we’re used to our own weirdness.)
The problem with zero percent tariff rates on foreign products is that you need to increase taxes domestically to make up for the lost revenue–and some of that increased taxation hits domestic manufacturing. In other words, “free trade” is really just reverse protectionism–protecting foreign products from domestic competition.
Also, while in America we rely on the corporate income tax, many/most of our trading partners rely on VAT’s, that they exempt on their exports but impose on our imports–in effect, it’s a tariff on our products in disguise.
American free traders would have you believe that there exist only two possible tariff rates in the world–either 0% or 2000%, and imply rejection of the former means automatic acceptance of the latter. But there is much to be said for 10-20% tariff rates of foreign products (i.e., revenue tariffs, where the intention is to raise government revenue, as opposed to 2000% protective tariffs, where the intention is to discourage the purchase of the foreign product), with the revenue generated to reduce taxation in other places, either in income taxes or on domestic manufacturing. We relied on revenue tariffs for all of the 19th century and most of the 20th, and for a good chunk of that time we didn’t need an income tax as a result.
Supporters of revenue tariffs do not want imports shut down, for the simple reason that you need imports to pay the taxes. Suggesting otherwise would be like saying that those who support state sales taxes don’t want people to buy anything. But in the case of revenue tariffs, the goal is to fund government (and, yes, provide a little bit more tax breathing room for domestic manufacturing), and that requires having the tax rates reasonable enough to encourage the (mass) purchasing of foreign products that will accomplish that.
Glen
Perhaps one specific tax that might be useful might be a 200% import tax on Middle East oil? There are many potential benefits to this, and I’m sure you don’t need me to enumerate them. As for how you identify it – well, ME oil has, I believe, a distinctive composition.
I think that it comes down to the belief that the benefits of free trade have gone toward capital and the costs have been borne by wage earners. The former has a narrow constituency and the latter a broad constituency. Voters have concluded that the free trade agenda has not given them enough benefit versus their costs. It’s as simple as that.