The U.S.-China trade war is having an impact, threatening to drag U.S. exports down for the first time in the Trump presidency and only the fourth time in more than 15 years.
But don’t expect it to affect his re-election efforts, based on statewide trade data I have reviewed.
This assumes you buy into the most common road map for Democrats to reclaim the White House.
This is just one of three ways currently on the horizon that clouds Trump’s path to another four years, however.
To be sure, the trade war is rippling through not only U.S. industry but also the world economy, being blamed for almost everything except global warming. (So far.)
There’s the stock market.
There’s the yield curve.
The Federal Reserve has, of course, suggested the trade war was a factor in its decision to lower interest rates, the first cut since the global economic crisis more than a decade ago.
The drop in commodity markets in the price of copper, a key barometer for the construction industry, is being blamed on a Chinese economy being weakened by the trade war.
A drop in confidence among Japanese manufacturers to a three-year low was tied to the trade war.
But if you buy into the first scenario, the notion that holding Pennsylvania, Wisconsin and Michigan will be key to President Trump’s re-election, here’s what I can tell you:
Exports to China from two of the three states, Michigan and Pennsylvania, are down 14.86% and 11.86%, respectively. That’s not insignificant but it is less than the U.S. average of 18.19% (Overall U.S. exports to the world are off 0.99%.) More importantly, in both cases, exports to China account for 5.3% of all their exports. So, yes, there’s a bite, but it’s more like a bite from a mosquito than a shark.
Exports to the third “key” state in the popular scenario, Wisconsin, are off more than the average, down 26.26%, but those exports only make up 5.72% of all of the state’s exports. Exports to China make up 6.31% of all U.S. exports.
In other words, don’t count on the U.S.-China trade war to sway too many voters in those three states — at least not away from Trump.
What if the popular theory is wrong, as popular theories so often are?
There are two more possibilities.
First, what if it’s not just about those three states? What if there are other states that could flip, or one or two bigger ones?
Trade with China is down more than 50% in five states or territories, though the first six months of the year, the most recent U.S. Census Bureau data available.
It is down more than 40% in another three and more than 30% in another seven. It is down more than 20% in a preposterous 28 states.
Four states in this list of 28 — those where trade has dropped more than 20% — are among the top 10 states for exports to China.
Get this: Two of them voted twice for former President Obama and then flipped to President Trump in 2016.
One of them, Ohio, is often seen as the state that delivered re-election to President George W. Bush over Sen. John Kerry.
The second, Florida, was the state that delivered the presidency to then-Gov. George W. Bush over Vice President Al Gore.
Exports to China from Ohio are down 27.96%, though those exports accounted for only 5.31% of all the Buckeye State’s exports through June.
Exports to China from Florida are down are more astonishing 48.18%, but those exports account for but 2.36% of all exports. The previous year, however, exports to China was accounting for almost twice that, at 4.41%. Probably more than a mosquito bite — and we Floridians know about those, particularly in this rainy August — but still less than a shark bite. (Unfortunately, we know something about those as well, though indirectly for almost all of us.)
A third path? U.S. recession.
As President George Herbert Walker Bush discovered in 1992, that’s a tough obstacle to overcome.
What will give Trump supporters a boost, however, is that the first President Bush is one of only four presidents to have lost a re-election effort since 1900, the others being President Jimmy Carter to Ronald Reagan in 1980 (when interest rates were sky-high and the seemingly endless Iranian hostage crisis was only days from ending), President Herbert Hoover to Gov. Franklin Roosevelt in 1932 (during the Great Depression), and President Taft to Gov. Woodrow Wilson in 1912.
Interestingly enough, one of the key planks from Wilson, a Republican, was tariff reform.
I’m not hearing too much about tariff reform from any of the candidates these days.