Can the GOP survive a trade war?

On July 6, Donald Trump expressed his wish to apply tariffs on Chinese goods of $ 34 billion and China immediately reacted by penalizing US imports, from soybeans to Teslas. The European Union, Canada and Mexico have also imposed retaliatory levies in response to Trump's provocations. Four days later, he escalated the dispute, threatening customs duties on an additional $ 200 billion worth of Chinese goods, including auto parts, refrigerators and electronics, as well as gloves. baseball and handbags. The global trade war is underway.

Trump says that trade wars are "easy to win". Economists think differently, although most expect the United States to emerge without serious harm. A more important question is: Will Republicans? This will depend on the scale of the conflict and the damage it causes to American businesses and workers. The first signs are disturbing. Trump alarmed the GOP legislators on July 5 by threatening to impose tariffs on the $ 500 billion worth of Chinese goods imported into the United States "MPs hate what the president is doing". "None of them think that's a good idea."

Maximizing threats are the foundation of Trump's approach to governing. He is betting that when he threatens trading partners around the world, they will be forced to surrender according to his will – and the greater the threat, the more foreign concessions will be important. "No president before Mr. Trump dares to threaten China with half a trillion dollars in tariffs," said ././., The former chief strategist of the White House and one of the first trade policy makers "America First" Donald Trump. "He put his six cannons on the table, and there are bullets in every room."

Trump's decision of triggering a trade war four months before the mid-term elections carries a risk for his party. faithful will follow will carry the weight of the fallout. This was not the case with his major actions before now. The repression against refugees and immigrants has not hurt the white voters, the blue-collar workers, who are the heart of his support. And even if they benefited little from his tax reduction, aimed primarily at corporations and the wealthy, they were also not directly penalized

Trade is different. Most of the punitive tariffs around the world fall heavily on the Farm Belt and Rust Belt states that went to Trump. Many of these new measures are designed, with almost surgical precision, to harm his followers. Of the 30 congressional districts hardest hit by Chinese soybean rights, 25 are represented by Republicans, 5 by Democrats, but 30 voted for Trump

Canada, Mexico and the United States. EU have targeted specific Republican politicians. House Speaker Paul Ryan of Wisconsin and Senate Majority Leader Mitch McConnell of Kentucky highlighting items such as cheese, Harley-Davidson motorcycles and whiskey produced in their states and districts. Base members and their constituents will not be spared. US Census Bureau data show that states whose economies are more dependent on exports – and thus more exposed to foreign retaliation – have distorted the Republicans in 2016.

Trump and his party may already be experiencing early shocks. Although this does not attract much attention, the president's net approval rating in Morning Consult's monthly polls has dropped nearly as much in rich-farming states, such as Kentucky (21%), Canada, and the United States. Montana (21%) and Oklahoma (25%), as in the coastal states of California (15%), Rhode Island (21%) and Mbadachusetts (22%). "Trump is underperforming in Ag States," says Jennifer Duffy, who follows the Senate and Governor's races for the non-partisan Cook Policy Report. "In places like North Dakota and Nebraska, which he has earned with a double-digit margin, he now exceeds 50%, and in Iowa, that he's won with 9 points, it is well below 44%. "

Where tariffs will hit the highest

US product categories targeted by foreign tariffs, measured by 2017 export sales to the trading partner concerned

Economists warn that the trade war Trump will lead to higher prices for US consumers who import intermediate goods such as semiconductors. But while the macro effect of the new foreign tariffs seems so far limited, their impact will be strongly felt by specific industries and businesses across the country, many of which are major employers critical to the economies of the economy. State, and therefore be sure to cause a political disturbance.

This means problems in the agricultural belt, where agricultural staples have been hit by tariffs. US farmers are already facing lower prices for corn and wheat. Total farm profits are at their lowest level since 2006, rising from $ 123 billion in 2013 to less than $ 60 billion this year, as predicted by the US government by the Department of Agriculture. Making US agricultural exports less competitive on some of their larger foreign markets will only make things worse.

Coastal states will suffer as well. In Alaska, the world's largest supplier of wild-caught salmon, China's new seafood tariffs could cut the incomes of the state's 16,000 commercial fishermen and damage its main manufacturing sector, fruit processing In Maine, these fees are costly to lobster companies moving to Canada, while steel tariffs have made their lobster traps more expensive. Florida's boating industry will be slowed down by motorboat taxes imposed by Canada, the European Union and Mexico

States with a Big auto industry are also reluctant, especially from Michigan to Mississippi. have built some of the largest plants in the United States. Many of the vehicles produced by these factories are shipped overseas. In Alabama, the Tuscaloosa factory in Daimler AG exports more than 70% of Mercedes-Benz SUVs that it produces. Car manufacturers are also large regional employers. The BMW AG plant in Spartanburg, South Carolina, with 10,000 workers, is located on a sprawling network of 235 US suppliers and is responsible for most of the cars produced in China.

Kentucky and Tennessee, home to the US whiskey industry, are targeted by the four major trading partners of the United States: Canada, China, the EU, and Mexico. And along the coast of the Gulf of Mexico, which accounts for 80 percent of US crude oil exports, fares will hit the local economies of Gulfport, Miss., In Houston. Since Congress lifted the ban on US oil exports in 2015, foreign demand has helped the domestic oil industry recover from recent low prices. New tariffs could make crude oil less competitive and slow down double-digit export growth.

The impact of these global retaliation measures is widespread enough that even Republicans in safe seats are worrisome. Not only do Trump's actions contravene the free market principles of the GOP lawmakers, but their political costs are also difficult to gauge, because he did not explain when and under which conditions he was willing to put a term to hostilities.

GOP strategists say they will have more trouble beating Democrat challengers in the Senate races in Tennessee, Arizona and Nevada, where a positive business message has long been the basis of the Republicans call. They will also find it harder to bring down the vulnerable Democratic senators from North Dakota, Montana and Missouri. "The places where members are most concerned are the states where it's actually a mono-industrial economy," says a Republican strategist who requested anonymity to share his internal fears. Trump and some of his top business advisers are willing to bear these costs because they believe that the showdown will eventually create national manufacturing jobs that will benefit the grbadroots of the president's working clbad. But most other Republicans recognize that many of these same workers will be among the first to suffer now that tariffs have begun to bite. "It's a stupid policy," Nebraska Senator Ben Sbade publicly complains in March, "but he has authority." Even the most loyal supporters of Trump do not claim that American workers will not be caught in the crossfire. "It's not going to be without some disruption," concedes Bannon. "Trump never promised the opposite." With the threats worsening and Trump shows no sign, he will back down, events could get out of hand. In early July, the Chinese Ministry of Commerce accused the United States of igniting "the biggest trade war of economic history". A Bloomberg Economics report, released in March, estimated that a real trade war was driving up import costs by 10%. suffered with similar retaliation, would hurt the global gross domestic product of $ 470 billion – about the size of the Thai economy

The political fallout would be proportional. A study by the Peterson Institute for International Economics revealed that such a scenario would result in a 2 to 3 percentage point increase in the US unemployment rate, a fall in badet prices and a disruption in supply chains and supply chains. productivity. Even actions in the midst of a total trade war would create tremendous disruption. In an interview with Fox News on July 2, Trump, who foresaw what he expected to say to foreign leaders at the NATO summit, was threatening what he called "the big one" – a overall price for imported cars and trucks. Last year, the United States imported $ 192 billion worth of vehicles and $ 143 billion worth of additional auto parts. "The imposition of high tariffs on US auto imports would pose an existential threat to NAFTA," warned Brian Coulton, chief economist at Fitch Ratings Inc., in a research note

. and their desire to protect voters, Trump supporters in Congress play for time. "What I say to the voters is to give some room to President Trump," said Republican Rep. Steve King, whose Iowa district contains 18,000 soybean farms, the July 9th. room to negotiate freely here, and see how it will come out. Do not undermine the president and take the lever away. "

But as the impact of retaliatory tariffs is making its way through local economies in states across the country, it will not be Trump who has to show up at public meetings and answer voters' questions The longer the trade war lasts, the more likely the backlash will be.The issue of concern to Republican politicians is how long they will have to endure it.