Party realignment on free trade?

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To many observers, Trump’s 2016 campaign signaled a fundamental shift in Republican thinking on free trade. Prior to the last election, Republicans were thought of as the party of free trade. Then something seemed to change. Candidates from both parties, who shared very little common ground on most policies, expressed a common skepticism of free trade. 

The surprising alignment of Republicans and Democrats on trade raises a variety of questions. Is Trump’s position unique or has there been a deeper shift in the Republican Party? 

Let’s consider some of the common arguments and evidence. 

THE 'TRADITIONAL' PARTY DIVIDE

Republicans were once reliable supporters of free trade. Republicans in congress were chiefly responsible for the spate of trade agreements negotiated under the Bush Administration. Republican-held chambers extended fast-track authority to the Bush White House. They also voted overwhelmingly in favor of the trade agreements that were signed under Bush. In fact, trade bills enjoyed support from 93% of Republican seats, on average.

Contrast that with Democratic voting behavior. Democrats in the House voted in favor of trade agreement ratification roughly 35% of the time. Democratic support clearly wasn’t zero. Agreements like the one with Jordan were passed by voice vote (implying unanimous support). But then deals like DR-CAFTA only received 15 Democratic ‘yes’ votes. 

 
 

This consistency in Republican voting behavior can be attributed to a number of factors. One of them is ideology. Republican orthodoxy is shaped by an underlying belief in free markets and removing the state from direct management of the economy. The policy implication is free trade. 

Not coincidentally, Republicans also receive the financial support of interest groups who prefer trade openness. The United States Chamber of Commerce, which broadly represents pro-export interests, and financial institutions are heavy donors to Republican candidates. 

The same can’t be said for Democrats. Democrats appear to be less committed ideologically to trade. Instead, votes are shaped more by concerns for many trade-related issues such as labor regulations, environmental standards, and human rights. 

As a result, Democrats enjoy a vast majority of the money from organized labor and a variety of other advocacy organizations.

 
 

Thus, at least in congress, there was a clear divide between the parties for several decades.

It turns out that presidents haven’t exhibited similar differences. Since WWII, presidents, regardless of party, pursued greater trade liberalization. Prior to the wave of agreements negotiated under Bush, Clinton oversaw NAFTA’s formation. After Bush, three additional agreements were ratified under Obama (although he publicly opposed them on the 2008 campaign trail). 

Trump’s position is unique. His opposition to status quo trade policies breaks from Republican orthodoxy in congress. And it breaks from the Oval Office’s decades-long commitment to liberalization. 

 

WHERE HAS THE CHANGE COME FROM?

Fissures within the Republican Party are not entirely new. Change started to occur a decade ago with the rise of the Tea Party. Conservative voices in the Republican Party started calling for a more isolationist approach. Where the US once played a leading role in trade liberalization, there was growing sentiment that globalization was doing more harm than good to US interests. 

But that only begs the question: where did these sentiments come from?

One explanation for changing attitudes focuses on the thinning wallet of American labor, particularly in manufacturing. 

The globalization of production and automation have both accelerated the outsourcing of manufacturing jobs and wage stagnation. The result is a swath of the population — concentrated in areas like the Rust Belt — where household incomes are facing downward pressure from global market forces.

 
 

The political implication is straightforward: workers are increasingly disillusioned with the economy. Free trade is no longer thought to make Americans better off. Instead, retreating from openness is widely seen as a viable way to kick-start a manufacturing revival in the US. 

Hence, Trump’s message: make America great again through an economic nationalism that hearkens back to the mercantilism of Old Europe. It’s a policy that clearly resonated with voters in 2016. 

Note that not everyone agrees on the reasons for Trump's victory. Some have pointed out that the socio-economic status of the average Trump supporter is higher than thought. It may not be the case that he appealed directly to hard-on-their-luck manufacturing workers. 

Another alternative is that “Make American Great Again” is coded language. There is significant evidence that race and gender played a role in shaping attitudes during the 2016 election. 

A thorough discussion of identity politics is beyond the purview of this essay. However, it is no surprise that skepticism toward free trade is higher among older white men — i.e., those most vulnerable to globalization’s downsides. Pew reports that support for trade is much higher among racial minorities and younger voters. 

< READ PEW REPORT HERE

There is no single answer to why Republicans have a more cautious view of free trade. However, there does seem to be growing sentiment that trade is bad for American firms and their workers. 

 

HOW FAR HAVE REPUBLICANS DRIFTED? 

On its face, Trump’s election is preliminary evidence that Republican attitudes have shifted. But we can look even deeper. 

Polls showed a curious blip in public opinion at the time of the election. Republican support for trade dipped precipitously around October of 2016. Yet, there is no reason to think that the economic situation of voters changed dramatically in such a short window of time. 

Survey responses, then, aren't necessarily evidence of growing frustrations with the economy. Instead, trade attitudes appear to be elite-driven. In other words, Trump’s campaign was not purely a response to voters’ preferences. Trump shaped attitudes. 

Voters are only part of the story. What matters more directly for policy is: how has party leadership responded to Trump’s moves? 

The true test of Republican (re-)alignment is found in congress’s reply to the White House. That reply has been highly mixed. Senior leadership in congress has spoken out loudly against Trump’s tariffs on steel and his unilateral approach to China’s failure to protect intellectual property. Worried that unilateral action leaves American vulnerable to trade retaliation, Republicans like Paul Ryan and Kevin Brady recently cautioned Trump against protection. 

The willingness of senior Republican leadership to confront Trump means we shouldn’t overstate the party’s change of heart on trade. Trump is not without support in his own party. But that support is also not overwhelming. Instead, some of Trump’s strongest advocated come, miraculously enough, from the other side of the aisle. Bernie Sanders applauded Trump’s retreat from the Trans-Pacific Partnership. More recently, senior Democrats like Chuck Schumer applauded Trump’s tough stance on free trade. 

 

MOVING FORWARD

The Republican Party is certainly showing signs of internal disagreement. However, it’s too soon to say that there’s been significant realignment. 

One possibility is that congress will act to reign in Trump’s authority over trade policy. The legislative branch enjoys constitutional authority over trade policy. They delegate this authority by granting fast-track powers to the president. But, if Trump distances himself too far from congressional preferences on trade, there could be action to roll back presidential powers.