Getty
- Donald Trump’s “phase one” trade deal may be too little, too late.
- The president’s trade war with China has hammered manufacturing in Midwestern states that played a key role in voting him into office, according to the New York Times, potentially imperiling his reelection chances.
- Slowing job growth and declines in factory employment in the Midwest, especially in counties that swung from Obama to Trump, could be problematic for Trump.
- “By September or October of next year, if you’re campaigning in Wisconsin, Michigan, Ohio, western Pennsylvania or Indiana, you can point clearly to the trade war as a cause of growing economic malaise in those states,” one economist told the Times.
-
View Business Insider’s homepage for more stories.
Donald Trump’s “phase one” trade deal may be too little, too late. His trade war with China has hammered manufacturing in Midwestern states that played a key role in voting him into office, according to the New York Times, potentially imperiling his reelection chances.
Almost every Midwestern state has added jobs in the past year, but the rate of job growth has slowed in Michigan, Pennsylvania, and other states that cemented Trump’s victory in 2016, the Times found. It has also fallen in states that he nearly won, such as Minnesota.
Factory employment declined in Wisconsin, Pennsylvania, and other Midwestern states in the year to June, the Times said. Their reliance on manufacturing and agriculture meant Trump’s tariffs and depressed overseas demand had a disproportionate impact on their economies.
The most striking trend could be seen in counties that voted for Barack Obama in 2012 then went to Trump in 2016. Their job growth has slumped relative to the rest of the Midwest and the broader country, the Times reported.
For example, Macomb County in Michigan added 5,600 manufacturing jobs in the first 18 months of Trump’s presidency — one of the fastest growth rates nationwide. However, it lost nearly 1,500 manufacturing jobs in the year to June, and its overall job growth has stagnated. Racine County in Wisconsin, Erie County in Ohio, and other counties that swung to Trump have suffered similar reversals of fortune, the Times found.
The transportation and warehousing industries in Obama-Trump counties are also hiring less, the Times reported, suggesting the trade war is dealing broader damage.
“It’s spreading beyond manufacturing to industries that move, ship and store goods,” Sarah Crane, an economist at Moody’s Analytics, told the newspaper.
The fallout from the trade war could throw a spanner in Trump’s reelection campaign, as he pledged to revitalize manufacturing in the Midwest, and undoubtedly plans to trumpet job creation in his reelection bid.
“By September or October of next year, if you’re campaigning in Wisconsin, Michigan, Ohio, western Pennsylvania or Indiana, you can point clearly to the trade war as a cause of growing economic malaise in those states,” Michael Hicks, an economist at Ball State University in Indiana, told the Times.
Moreover, the toll of Trump’s tariffs won’t be undone overnight, Hicks said. Job losses are poised to escalate in the next few months, and the Midwest is unlikely to stage a full comeback before the presidential race hits its peak next fall, he said.
