Data, Data, Data

Many of you may be expecting a column discussing the Biden administration’s executive order on outbound investment that was signed last Wednesday. If so, you are going to be disappointed. At this point I would only be writing what everybody else in town has been writing—an explanation of what it does and speculation about what it means. Instead, I’m going to let the dust settle for a bit and see what the experts have to say about the Treasury Department advance notice of proposed rulemaking (ANPRM), which goes into great detail about how the new requirements are likely to work. These things always leave unanswered questions and create unexpected consequences, and I think it is more useful to look at those as they begin to appear.

Instead, I am going to return to a topic that is a regular in the trade world: what Americans think about trade. This is timely because there is new data, thanks to Gallup, which published one of its periodic studies about public opinion on a wide range of issues and the gap between our two political parties on them. One of the questions addressed trade, and I want to focus on that. Gallup looked at the same issues in 2003, 2013, and 2023 and explored how partisan differences have changed over the years. It turns out that there is a partisan gap on trade, but it is smaller than many other issues, although providing only 10-year data obscures some important details. (There were much bigger gaps on universal healthcare, gun control and global warming, among others.) The statement posed to respondents was “foreign trade is opportunity for economic growth.” In 2003, the parties were almost the same at around 50 percent agreeing, with Republicans slightly ahead of Democrats. In 2013, both parties were just above 50 percent, with Democrats slightly more positive than Republicans. By 2023, though, Democrats had moved to a much more favorable view—74 percent—while Republicans had declined slightly to 49 percent. However, while the positive trend has been consistently positive for Democrats, the 10-year gaps obscure a sharp drop in Republican support for trade that began in 2015 and accelerated during the Trump administration. Some of that support is now returning, but it has not yet reached Democratic levels.

When people see this data, they are usually surprised at the level of Democratic support for trade, particularly in light of the many Democratic trade skeptics in Congress. In fact, there is a disconnect in both parties. Democratic politicians are more trade skeptical than their voters, and Republican politicians are more pro-trade than their voters. This is partly ideological and partly related to where the parties’ financial and organizational support comes from—business for the Republicans and organized labor for the Democrats. This disconnect will continue because trade is simply not top of mind for voters. Pew Research Center data from last January bears that out. When asked to name the United States’ top policy priorities, Americans ranked trade at 18 out of 21. Their top three priorities, as they have been for more than 20 years, are the economy, healthcare, and terrorism. Voters are looking primarily at other issues, and politicians out of line with their thinking on trade have not always suffered at the polls if they are right on the issues people think are more important. Of course, if Trump is the 2024 Republican nominee, trade will be front and center in the political debate, and voters may pay more attention.

What conclusions can we draw from this? First, there is more support for trade out there than the anti-trade activists would have you believe. The media narrative is often about the costs of trade—closed factories and lost jobs, which certainly occur—but more people recognize the benefits of trade, because they have jobs tied to it and because they appreciate the expanded choices and lower prices imports can bring. Second, the administration is missing an opportunity, both politically and economically, to promote exports and the growth that comes along with them. They have taken a risk-averse approach to trade in order to avoid a fight with the trade skeptics in their party, but it is apparent that comes not only with an economic cost but with a political cost in light of where the majority of their voters are. Third, Republicans in the House, not being dumb, will take advantage of this error, some because they think trade agreements are good policy and others because they understand it highlights a potential political weakness for Biden.

Finally, Republican pro-trade efforts in the House may not ultimately make much difference because they may not have the support of a majority of House Republicans, thanks to Trump, and in the absence of an administration change of policy that would move Democrats in a pro-trade direction, their efforts won’t get much beyond the stage of rhetoric. But, then again, as we head into an election year, rhetoric is exactly what we should expect, and the data about trade provides some ammunition.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.