Somebody should tell Democrats they've become the free trade party
Posted March 12, 2018 3:24 p.m. EDT
(CNN) — Nothing better illustrates the Democratic Party's inability to adapt to the changing nature of its political coalition than the party's paralysis in the fierce debate over President Donald Trump's sweeping new tariffs on imported steel and aluminum.
While the tariffs Trump announced last week have ignited fierce blowback from a wide array of congressional Republicans and business groups usually allied with the party, Democrats have been almost entirely tongue-tied on the issue.
Only a tiny handful of Democrats -- including former Virginia Gov. Terry McAuliffe and three House members who lead a centrist Democrat task force on trade -- have joined Republicans and a wide array of economists in warning that the tariffs could cost more jobs than they create and risk a broader trade war. A slightly larger number of Democrats have welcomed the tariffs, most of them representing Rust Belt states such as Senators Bob Casey of Pennsylvania, Joe Manchin of West Virginia and Sherrod Brown of Ohio and Conor Lamb, the Democratic nominee in today's House special election in Pennsylvania, or positioning themselves as champions of the left (including Senator Elizabeth Warren). Most Democrats have tried to avoid the issue altogether.
This silence speaks volumes about the Democrats' inability, or unwillingness, to recognize the evolving nature of the party's demographic and geographic base. While many Democrats still think of the party as the home of blue-collar industrial regions hostile to trade, in fact, the party is now centered in the major metropolitan areas that are integrated into global markets and at the forefront of the transition into the information-age, digital economy. The most telling measure of that shift: while Hillary Clinton won fewer than one-sixth of America's counties in 2016, her counties accounted for nearly 60 percent of all US exports, according to calculations by the Metropolitan Policy Program at the center-left Brookings Institution.
The big Democratic-leaning metro areas are "exporting and winning," says Mark Muro, the Metropolitan Policy Program's policy director. "These are truly outward looking economies that are being driven by these exports and the benefits [of exporting] are so large that they circulate broadly within these economies. And so they do create a different view of global engagement. These places tend to welcome it; they feel it in the entire economy."
Yet few Democrats are articulating the interest of those areas in the tariff debate -- either because they share the President's long-standing suspicion of free trade, or because they fear antagonizing the labor unions who promote protectionist policies as well.
"The question is do they pick a fight with the industrial unions over this?" says Matthew Bennett, senior vice president of Third Way, a centrist Democratic organization, which is critical of the tariffs. "Even if they believe this is an idiotic economic move they don't want to expend the energy to deal with it because they have too many other things to attack [Trump] over. It is slightly controversial...inside the Democratic family so I think nobody really wants to bother with it."
And yet that reticence has left Democrats in an inherently precarious position: failing to support international economic engagement when both opinion polls and economic data show it is their coalition that is now most invested in it.
The big blue metro areas that now anchor the Democratic electoral map in every state are, by far, the nation's largest exporters -- and thus the places with most at risk from a trade war that could ultimately raise barriers to the international sale of US goods and services. Smaller communities aren't immune to the risk because many revolve around a single employer, such as an energy producer or manufacturing company, that is heavily dependent on foreign markets, Brookings data show. But the heaviest volume of American exports is now cascading from its biggest cities.
In 2016, MPP reports, the New York City metro area alone accounted for nearly $130 billion in exports, with Los Angeles producing $99 billion, Houston $67 billion, Chicago $61 billion, Dallas $54 billion, Seattle $52 billion, San Francisco and Boston both around $40 billion, and Detroit, Philadelphia, Miami, San Jose and Washington, DC, all accounting for around $30 billion. In many of these cities, exports account for about 10% of the total local economic output -- although that number spikes to around 15% or above in some cities including Detroit, Houston and Seattle. Exports represent about ten percent of the economy even for a wide array of mid-sized cities, such as St. Louis, Cleveland, Tulsa and Pittsburgh.
All of these places export a wide variety of products, including large amounts of manufactured goods in many cases. But as job growth in the digital economy increasingly concentrates in the largest metro areas, their export mix is shifting toward services, from business consulting to software development. And on that front, American companies face less pressure from imports than do their counterparts in manufacturing. That means the big metro areas are experiencing all of the upsides and fewer of the downsides of trade than smaller communities, which still rely on goods for four-fifths of their exports and are more susceptible to competition from imports.
"The expansive, digitally powered services experience is very different from the manufacturing realm, where they have experienced significant losses of jobs associated in part with China's [rise]," says Muro.
With this large economic stake in expanding markets abroad, Democratic mayors were much more supportive than their congressional counterparts of former President Barack Obama's efforts to negotiate the pan-Asian free trade agreement called the Trans-Pacific Partnership that Trump quickly scuttled after taking office. (The other 11 nations involved in the talks signed an agreement last week creating the partnership without US participation.)
In an interview, Chicago Mayor Rahm Emanuel noted that his city now benefits from a wide array of global connections -- from a local Ford Motor Co. plant that exports "to more markets than any other Ford facility in the US" to the international trading that occurs on the Chicago Mercantile Exchange and the city's central role in shipping products by air, rail and truck.
In stark contrast to most congressional Democrats, Emanuel describes Trump's tariffs as both an economic and diplomatic risk. "First and foremost, you are playing Russian roulette with America's economy," he says. "Second, you are playing Russian roulette with America's standing in the world because you haven't differentiated friend from foe."
Polling, strikingly, shows most of the modern Democratic electoral coalition agrees with Emanuel. Polls now consistently find that Democratic voters are more supportive than Republicans of free trade. A national Quinnipiac University survey earlier this month found that while nearly three-fifths of Republicans backed Trump's aluminum and steel tariffs, almost three-fourths of Democrats opposed it.
That may reflect the partisan tendency to retreat to opposite corners on anything relating to Trump. But the trend long precedes him. Surveys by the non-partisan Chicago Council on Global Affairs have found that Democrats and Republicans were about equally likely from the late 1990s through mid-way in George W. Bush's presidency to say globalization has been good for the US.
But since about 2006, the share of Democrats who see positive benefits from globalization has continued to rise, from just over half then to about three-fourths in 2017. Republicans have remained more equivocal, with only 55% seeing positive benefits. Democrats now are also much more likely than Republicans (69% vs. 48%) to say that trade helps to create American jobs. And while about 7 in 10 Democrats in the survey said the North American Free Trade Agreement has benefited the US, about 6 in 10 Republicans said it has hurt. Republicans are also much more likely than Democrats to blame manufacturing job losses on trade rather than automation.
All of this contravenes the historic perception of Democrats as the party suspicious of trade, largely because of the influence of organized labor, and Republicans as the pro-trade party because of the influence of big business. But it reflects the modern reality that Republicans have become the party of blue-collar, older and non-metro white America, where suspicion of trade is just one strand in an insular nationalism that also includes skepticism about international military alliances and immigration.
Meanwhile, Democrats now rely on a preponderantly urban-based coalition of minorities, millennials and white-collar whites largely receptive to global engagement in all of its forms.
Further detail provided by the Chicago Council show that college-educated Democrats are consistently the most positive about expanded trade on virtually every question -- while Republicans without college degrees are the most negative. Likewise, an NBC/Wall Street Journal survey last fall found that Americans who see globalization as a positive for the country are also much more likely than those who don't to believe immigration also strengthens America. For that matter, those positive on globalization were also much more likely than those uneasy about it to express comfort with the nation's cultural changes in recent decades.
Trump's confrontational approach on trade -- like his hardline against both undocumented and legal immigration-shows how he is bending the GOP to the demographic reality that their coalition now revolves around older and working-class whites dubious of international influences in any form. That creates a clear opportunity for Democrats with white-collar professionals who are already recoiling from Trump on personal and cultural grounds -- and are more open toward global engagement than the GOP's populist wing.
Yet in the trade debate Democrats -- with the rare exception such as McAuliffe, the former Virginia governor and possible 2020 presidential candidate -- are almost entirely rejecting the chance to speak to those voters, or to champion the globally oriented information-age industries that are driving much of the job growth in the 21st century. Hardly any Democrats have stated the obvious as forthrightly as McAuliffe did when he wrote in the New York Times this week, "The future of the American economy is jobs in high-skill fields like cybersecurity, advanced manufacturing and energy technology, not in trying to reopen mills that closed down in the 1980s."
By elevating the interests of declining steel and industrial producers in blocking imports over the needs of digitally based and service industries in maximizing exports, Democrats are steering through the rear-view mirror: setting their course by a memory of when blue-collar workers, many of them in labor unions, provided most of their votes. Trump's nostalgic focus on reviving 20th century industrial behemoths that now employ only a fraction as many Americans as they once did -- from steel to coal to construction -- provides Democrats an opportunity to claim the high ground of nurturing the economy's future. But the party's paralysis in the tariff debate shows they are far from ready to seize it.