While all of
The huge bipartisan majority on the procedural question this week virtually guarantees that the bill will make it through the Senate, and it illuminates the changing contours of the
This Republican split should have come as no surprise. Last year, just a month before the midterm elections, a similar bill won the support of 99 Republicans, with only 74 opposed. If anything, the balance inside the new House Republican majority has shifted even further toward confronting the Chinese: Compared to traditional business-oriented conservatives, Tea Party populist conservatives are significantly more hawkish on Sino-U.S. trade relations. In a nomination contest in which Tea Party sympathizers will enjoy disproportionate influence, it is not hard to understand why even a quintessential business candidate like Mitt Romney has chosen to embrace a hard line on Chinese currency and trade practices.
Republicans are hardly out of step with the country, either. In a Pew survey conducted earlier this year, 54 percent of Republicans and Republican-leaning independents said that it was very important to get tougher with
This is not to say that Americans see
It’s easy for business-oriented leaders and publications to dismiss these sentiments as raw politics. But there’s more to them. In a recent NBER paper, “The China Syndrome,” economists David Autor, David Dorn, and Gordon Hanson, who cannot be accused of shilling for anyone, examine the effects of Chinese import competition on the U.S. economy. Their conclusion: The more exposed a local labor market is to that competition, the larger its negative effects. They summarize matters this way:
Rising exposure increases unemployment, lowers labor force participation, and reduces wages in local labor markets. Conservatively, it explains one-quarter of the contemporaneous aggregate decline in
I hope that other economists will examine and assess these findings, which seem solidly grounded. If Autor, Dorn, and Hanson are right, the
And speaking of politics, what about the House and the White House? John Boehner characterizes the Senate’s action as “dangerous” and believes that forcing another country to revalue its currency goes “well beyond what the Congress ought to be doing.” If he has his way, the bill will never come to the House floor. But it’s not clear that he will, because he probably doesn’t speak for a majority of his own party, let alone of the House. If a bipartisan coalition feels strongly about the matter, it can probably get enough signatures on a discharge petition to override the Speaker’s wishes.
As for the president, he has declined to take a position on the matter. Trapped between the imperatives of global diplomacy and pressure from the Democratic base, no doubt he is hoping that the Republican leadership can keep the bill bottled up indefinitely. If not, he’ll have to declare himself. And if legislation reaches his desk, he’ll be forced to make what could turn out to be a fateful choice: Sign the bill and risk a trade war, or veto it and face an onslaught from Mitt Romney throughout the
In a lead editorial, the Wall Street Journal argues that “a major benefit of free trade is its stabilizing effect on rising powers like
William Galston is a senior fellow at The Brookings Institution and a contributing editor for The