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July 18, 2018 | Free Trade Good or Bad? Trump’s Amazing Impact on Republicans and Democrats

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
The shift of Democrats towards supporting free trade, and Republicans the opposite is a sight to behold. Blame Trump.

Historically opposed to free trade, Democrats increasingly identify with values like openness to trade. Republicans have done the opposite as noted by Greg Ip in the Wall Street Journal.

Since the 1940s, Republicans have branded themselves the party free trade, while Democrats—especially rank and file officials and congressmen—have more often been the party of protection. Those labels need updating. Mr. Trump’s imposition of tariffs on allies and adversaries alike is accelerating a migration of Democratic voters toward free trade and Republicans away from it. Among elected legislators, the median Republican is still pro-free trade and the median Democrat a skeptic, but those lines, too, are shifting.

The divide is also cultural: Democrats increasingly identify with cosmopolitan values like openness to trade, immigration and culture. For some, Mr. Trump’s dislike of free trade only makes it more appealing.

Free trade has yet to convert the bulk of elected Democrats, especially those in traditional rust-belt regions. Sen. Sherrod Brown (D., Ohio), a longtime skeptic of free trade, has allied himself with Mr. Trump on tariffs and stopped a tougher version of Mr. Corker’s proposal from getting a vote. Conor Lamb wrested a Pittsburgh-area district away from Republicans in a special election in part by endorsing Mr. Trump’s steel tariffs.

And the party’s rising progressive left instinctively equates trade deals with giveaways to corporations and the rich. In 2016 Hillary Clinton recanted her support for the Trans-Pacific Partnership, an ambitious 12-nation trade pact, under pressure from Sen. Bernie Sanders (I., Vt.), a self-described democratic socialist.

All this means that a Democratic-controlled Congress, traditionally hostile territory for free-trade legislation, may be friendlier now. Democrats may see countering tariffs and protecting trade pacts as politically useful not for its own sake but as a way of constraining Mr. Trump.

Ip Misses the Mark

Greg IP is my favorite WSJ writer. But I believe he misses the mark on this one. Just imagine, Bernie Sanders, a staunch opponent of Free Trade had won the election.

All of the republican writers and outlets that changed their tune to back their party would be attacking Sanders like mad.

There is some truth to Ip’s analysis but I propose something far more basic is behind the shift.

People Can’t Think

People cannot think on their own. They listen to Right-wing or Left-wing commentary bashing or loving the policies of the current president wants on a purely partisan basis.

That’s what the lead-in image says to me.

Mike “Mish” Shedlock

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July 18th, 2018

Posted In: Mish Talk

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