Should the Republican Party move to the left on trade?

Some argue that the Republicans should move to the left economically if they want to survive as a party.  Moving left means adopting several policies, including tariffs, discouraging outsourcing, investing in infrastructure projects, and more.  But will this really help Republicans win votes?

There are various rationales for tariffs, one of which is simple fairness.  For instance Trump has said Canada is "ripping us off."

Let's delve into the example of aluminum tariffs that Trump applied to Canada.  Aluminum smelters require massive amounts of electricity.  Aging smelters in the U.S. face tough competition from foreign rivals with access to abundant, cheap power.  A country like China, which has coal plants and nuclear plants in abundance, will have a built-in advantage versus a country like the U.S., which relies increasingly on sun and wind.  Tariffs can't change that.

But was Canada taking advantage of us?

According to a Wall Street Journal article, reinstating the tariff on Canada attracted opposition from more than a dozen aluminum companies including Alcoa Corp., Novelis Inc., and Arconic Corp.  They urged the Trump administration to instead pressure China to stop what they said were unfair government subsidies that encouraged excess aluminum production.

But one U.S. company, Chicago-based Century Aluminum Co., did lobby for tariffs on Canada.

So what about U.S. voters?

The tariffs have been unpopular with U.S. manufacturers.  The tariffs drove up costs for beverage cans, car parts, window frames, and other products made using aluminum.  And on top of that, Canada retaliated: the Canadian government put tariffs on a multitude of U.S. exports to Canada that contain aluminum such as bicycles and bike wheels, golf clubs, refrigerators, aluminum cans and foil, and much more.  The Canadian border taxes will cost U.S. producers about $2.7 billion, which is roughly the same as the expected impact of Mr. Trump's new levies.

The Democrats have noticed the pain of tariffs and are making a pitch to disgruntled voters.  Products from the state of Maine, including blueberries, seafood, and wood, have suffered from retaliatory tariffs during the trade war with China.  Democrats plan to highlight Mr. Trump's "broken promises to Mainers," saying his trade policies have hurt the state, said BJ McCollister, Mr. Biden's deputy state director for Maine.

Polls show that Maine is currently leaning toward a Democratic candidate for senator.

And then there are the farmers of the Midwest.  To ease the pain of the tariffs on China, President Trump attempted to bail out the farmers, but it wasn't enough to help small farmers.  Farms are dying off, and these latest shocks are helping to drive up farm bankruptcies and farmer suicides.

Retaliatory tariffs that hurt farmers have come from other countries as well.  For instance, India has imposed tariffs on 28 U.S. products, including almonds and apples, in response to Washington's refusal to exempt Delhi from higher taxes on steel and aluminum imports.

The bottom line: A study by the University of Warwick's economists has found that Trump's tariffs negatively impacted votes for Republicans in the 2018 election in districts that were directly hurt by the tariffs.

So to sum up, a policy that is intended to help American workers, by encouraging American consumers to buy American, can hurt many other American workers and has already cost votes.  "Moving left" economically could impact votes in other respects as well.  President Trump is thinking of putting a price cap on drugs manufactured in the U.S.  Drug-manufacturers are worried that this will cost jobs — American jobs.  Again, the motive is to help the American consumer.  And there is a fairness issue — other countries pay less for American drugs.  Still, drug-manufacturers believe it is a very bad idea.

To compete better with other countries in the world, we should fix the internal negative factors that affect manufacturing in the United States.  Moving left should be left to the Democrats.

Image credit: New Zealand Defence Force via WikipediaCC BY-SA 2.0.

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