Trump hopes tough trade stance will help him recapture Michigan

For years, Nelson Westrick, an auto worker from Sterling, Michigan, voted Democrat. But by 2016 he’d had enough. “There were these bad trade deals. It was just hurting good, middle-class blue-collar jobs,” he said.

Mr Westrick switched his vote to Donald Trump at the last presidential election, attracted by the Republican’s promise to stop US companies from moving jobs to lower-wage countries like Mexico and China.

He plans on sticking with the president at next month’s election, citing his tough stance on international relations. “Trump is the first president I know of that literally went after China,” Mr Westrick added.

Whether Mr Trump can again win support from former Democrats working in manufacturing, like Mr Westrick, could prove decisive in his attempt to recapture Michigan, as well as other swing states with large industrial bases and, ultimately, the White House.

Since taking office, Mr Trump has attempted to protect US manufacturing by imposing tariffs on imports of steel and aluminium from other countries, albeit with mixed results. Industrial activity is once again declining in the US with dire consequences for states like Michigan, a trend that has accelerated sharply during the pandemic.

The impact of globalisation started being felt more than two decades ago in Michigan, where manufacturing jobs declined over ten years from 1999. A meagre recovery began in 2009 after the Obama administration bailed out the auto industry — the bedrock of the state’s manufacturing base — and continued during the first two years of Mr Trump’s tenure.

The culprit for all those job losses, according to Mr Trump, was the North American Free Trade Agreement, which was ratified in 1994 and implemented over the following 15 years. Opponents of the deal argue that it encouraged companies to move jobs to Mexico; the entrance of China to the World Trade Organization in 2001 exacerbated the loss of jobs, they say.

But it is not just Trump supporters who blame trade liberalisation for the hollowing out of manufacturing. Democrats in Michigan also cite deals like Nafta as the primary reason for job losses in the sector.

“The standard of living has gone down the toilet,” said Ed Brulby, a Democratic campaigner in Macomb County. “Nafta, China joining the WTO — we have many bad aspects of trade”.

However, Sandra Polaski, a former US Labor Department official, blames not only trade policy, but changes to the tax code and a weakening of labour regulations that were implemented by multiple administrations from Reagan onwards.

“People started losing jobs and wages in the 90s and 2000s, and it continued to accumulate until the number of losers was big enough that it became political, and Trump put his finger on that,” said Ms Polaski.

Promises made by Mr Trump in 2016 included scrapping the proposed Trans-Pacific Partnership trade deal, being tougher on China over its trade deficit with the US, and revamping the much-hated Nafta deal with Canada and Mexico.

For Brian Pannebecker, an auto worker of 35 years from Macomb County just north of Detroit, Mr Trump’s renegotiation of Nafta is enough to secure his vote.

Joe Biden, pictured campaigning in Warren, Michigan, supported unpopular trade deals while a senator but has adopted a more protectionist stance during this election campaign © REUTERS

“Trump did something really remarkable for a politician,” said Mr Pannebecker, who founded Auto Workers for Trump. “He kept his word, he kept his promise to remove and replace Nafta, which was a horrible trade agreement.” 

Mr Trump’s “new” Nafta — The United States-Mexico-Canada Agreement — went into force in July 2020, and was designed to boost wages in Mexico while implementing rules governing how much of a US vehicle must be made inside the country.

But it has provided only a small boost to the US economy, according to impact assessments. The US International Trade Commission estimates the deal will grow jobs by 0.12 per cent and provide a 0.35 per cent boost to GDP in the six years following the agreement’s enforcement. The IMF estimates that the impact of the deal on US GDP will be negligible. 

“Trump comes out with USMC as the answer, but it really hasn’t made any difference in anyone’s life,” said Joe DiSano, a Democratic strategist in Macomb County. “We just haven’t seen the jobs that Donald Trump had promised.”

Still, the renegotiation of Nafta could hand Mr Trump an advantage over his Democratic rival Joe Biden, who supported the unpopular trade deal when he was a senator, a position for which he has since expressed hedged regret.

Mr Biden also supported the proposed Trans-Pacific Partnership and, more damagingly, the normalisation of trade with China in 2000 that ultimately paved the way for its accession to the WTO.

“Michigan lost half of all manufacturing jobs after the trade deals that Biden supported,” Mr Trump said in a rally in the state last month.

But the president does have problems in Michigan. His tariffs on steel imports pushed up the cost for manufacturers and hurt automakers. Manufacturing jobs have been declining for the last two years, even before the sharp blow dealt by Covid-19. An analysis of government figures by the Trade Justice Education Fund show that trade-related job losses have risen over the past three years.

That might explain why the president — who has styled himself as the saviour of factories — is trailing in polls that show Mr Biden with a seven-point lead in Michigan, according to the RealClearPolitics average.

In this election campaign, Mr Biden has taken a more protectionist tone, promising extra taxes for companies that move jobs abroad and promoting a “buy American” agenda designed to counter Mr Trump’s “America First” mantra.

The Democratic challenger has also made increasingly hawkish statements on China, criticising its trade practices and acknowledging the loss of jobs to the country. Like Hillary Clinton in 2016, Mr Biden has the support of the United Auto Workers’ Union.

Mr Biden also benefits from his association with the Obama-era auto bailout following the financial crisis.

“People remember Biden’s role in the auto bailout” said Mr DiSano. “I think that gives him an upper hand here in Michigan. It was also a nod to Michigan’s factory culture, it was an agreement of values . . . Joe Biden agrees with us here.”

Others are less certain. “My guess is that the race is tighter than the polls say,” said Marick Masters, a professor of political science and business at Wayne State University, Detroit. “Certainly the Democrats in the state know this is not a state they can take for granted. They don’t believe it’s going to be a cakewalk.”

Source: Economy - ft.com