By now, many economists are hoarse screaming that higher tariffs and a trade war will raise prices and hurt the U.S. economy.
But many Americans aren't listening.
A recent poll by Quinnipiac University, conducted in late January, found that 42% of Americans believe tariffs will help the U.S. economy. The United States' recent history with free trade might help explain the disconnect between economists and a large swath of the American public.For decades, mainstream economists claimed that free trade would be a clear win for the United States. Sure, they said, there would be some losers. But those losers would get new jobs in a growing economy and basically everything would ultimately be fine.
Everything turned out not to be fine. No research has made that more abundantly clear than a series of studies over the last decade-plus on what's known as the "China Shock." The shock refers to what happened to American communities after China joined the World Trade Organization in 2001. These studies have found that as a flood of Chinese imports came rushing into the U.S., it destroyed well over a million manufacturing jobs and created basically miniature depressions in communities around the country. Contrary to the assumptions of old-school economists, manufacturing workers struggled to adapt and move to new jobs in the aftermath. Read more..