Trump, trade and ‘the China shock’

© Daniel Raustadt

More on what a Donald Trump presidency could mean for the US’s external trade. Frankly, there’s no nice way of putting this, but should Americans vote for Mr Trump as their next president, those managing trade flows in and out of the US are unlikely to have a happy time in the following four years. However, both Mr Trump and surprise Democrat dark horse Bernie Sanders have clearly hit a nerve with their anti-trade rhetoric, and this insightful blog, by British economist Tim Harford, argues that economists may very well have underestimated the eviscerating impact of free trade on some parts of American society. “American workers who have been hurt by competition with China have been hurt more deeply, and for a longer period, than many economists predicted. Employment has fallen in industries exposed to trade competition, as expected. But it has not shown much signs of rising in export-oriented sectors. The US labour market is less flexible than we thought, it seems.”