By James Pethokoukis

I bet a lot of people think foreign trade was way more popular in the 1990s and early 2000s than currently. Globalization was on the march back then, as seen in the North American Free Trade Agreement and China’s admission to the World Trade Organization. But as Gallup notes, “Americans today are still more positive toward trade than they were at any point from 1992 through 2016.”

Now that approval rating is down from the 2020 peak, probably due to pandemic-related supply chain issues. Still, it’s higher than I would have guessed.

While economists generally love open trade, regular folks have more complicated views as they attempt to balance perceived self-interest with broader economic and social concerns. This mental process is illustrated by a graphic from a new NBER working paper, “Understanding of Trade,” by Harvard University economist Stefanie Stantcheva:

To get a deeper understanding of the public’s views on trade, Stantcheva designed and ran two large-scale surveys about each of the elements in the above diagram. Her findings:

People’s understanding of the price, wage, and welfare effects of trade is mixed. In general, respondents are optimistic about the efficiency gains from trade, but also understand that there may be adverse distributional consequences from it. Respondents’ own exposure to trade through their sector, occupation, skill, and local labor market shapes their perceptions of the impacts of trade on themselves, others, and on the broader U.S. economy. I also find patterns consistent with the idea of “diffuse gains and concentrated losses”: respondents’ perceived benefits as consumers are nonsalient and unclear to them, while those in at-risk jobs starkly perceive the threats from trade. Beyond material self-interest, people have broader social and economic concerns that strongly influence their views on trade policy. The belief that is most predictive of support for open trade is that trade generates efficiency gains. Furthermore, people who believe that those hurt by trade can be helped using other tools (compensatory redistribution) do not oppose free trade, even if they think that it will entail adverse distributional consequences. The results highlight the importance of compensatory redistribution as an indissociable part of trade policy in people’s minds.

Overall, not terrible results for trade proponents like myself. To focus on the GOP for a moment, still less than half—43 percent—believe the US should not aim for free trade. That, even though the party’s de facto leader is a protectionist. But the Republican answer to the question “Which groups of people do you think would gain if trade barriers such as tariffs were increased?” is more worrisome:

Democrats often tend to mention “the Rich,” “Government and Politicians,” “Big Companies,” and “Nobody” (suggestive of the view that, ultimately, everyone loses from trade barriers). Among Republicans, mentions include “the U.S.,” “everyone,” “workers,” “manufacturers,” and “domestic businesses.”

Clearly a lot of economic education needs to be done.

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