As America sits in limbo awaiting the result of President Donald Trump’s escalating trade war rhetoric with China, an analysis by the Brookings Institution’s Metropolitan Policy Program reveals that counties which voted for Trump in 2016 could be the hardest hit if a trade war were to materialize.
Why? The local economies in such areas lack the diversity required to absorb the potential fallout.
[Joseph Parilla, a fellow at the Brookings Institution’s Metropolitan Policy Program] says that America’s largest cities have big and diverse economies, including sources of economic growth that can’t be traded with other countries, such as tourism or government. But small towns are much more likely to have specialized in one or two industries that are tied to trading abroad.
This includes small Midwestern cities that deal in auto parts and other manufactured goods as well as cities along the coasts that produce and export chemicals and petroleum byproducts.
Topping the list is Columbus, Ind. — the home base for engine-maker Cummins Inc. and other automotive manufacturers, and the hometown of Vice President Pence. About half of its local gross domestic product, a broad measure of economic activity, is tied to exporting abroad.
If Trump’s trade strategies are successful, there could be great gains for such communities; but there is also more at stake if the president’s tactics fail.
And that includes potential political ramifications for Trump.
Brookings calculates that the counties that voted for Democratic presidential candidate Hillary Clinton actually produced most of America’s exports in goods and services — about 58 percent in 2015, compared to 42 percent for Trump.
However, because Clinton voters are concentrated in large, economically diverse cities, exports actually account for a greater proportion of economy in counties that voted for Trump than in counties that voted for Clinton. That means Trump voters would likely end up feeling the heaviest effects from changes to trade, Parilla says.