Americans Embrace Open Markets as Trump Disrupts Them

(Bloomberg) --

President Donald Trump and his advisers spent the weekend trying to send two economic messages to voters and markets: The U.S. isn’t careening toward a recession and trade talks with China are going great. They also followed an increasingly familiar script, arguing yet again that China is paying the cost of new tariffs, no matter what economists or CEOs may tell you.

Let’s set aside the question of where the broader economy is headed. There’s a growing body of polls that show Trump’s tariffs and trade war aren’t garnering widespread public support. For a White House convinced the rules of international commerce are stacked against America, that sounds like a messaging problem heading into his 2020 reelection bid.

Here are a few reasons why a different script might be in order:

• An NBC/Wall Street Journal poll just found a surge in support for “free trade.” The survey showed 64% (up from 51% in 2015) of Americans agreed with the statement “I think free trade with foreign countries is good for America because it opens up new markets and we cannot avoid the fact that it is a global economy.” Only 27% believed the opposite.
• The poll is not the first to show such a result. Tracking polls have consistently indicated Americans’ support for trade growing as Trump’s assault on the global trading system has accelerated. A February Gallup poll found that 74% saw foreign trade as an opportunity for economic growth with just 21% viewing imports as a threat. The support was up from 58% in 2016 and 46% in 2012, when an equal number saw it as a threat.
• Things get more complicated depending on how you ask the question, of course. Some polls appear to track the president’s broader approval ratings. Support for trade among Democrats has surged since Trump’s election, for example.
• You have to look hard for them, but there are some polls that show widespread support for the president’s trade policies. A Harris survey taken for the Harvard University Center for American Political Studies in May found majority support for Trump’s decisions to increase tariffs on $200 billion in imports from China after the collapse of talks.
• The same poll, however, found a slim majority of registered voters believed the trade war with China would eventually lead to higher consumer prices. Which is definitely not part of Trump’s talking point that the U.S. is winning as China bears all the costs.

Charting the Trade War

Head-spinning uncertainty on trade is a major drag on global growth. Indeed, analysis by Bloomberg Economics suggests the tweet is mightier than the tariff, with a bigger negative impact from uncertainty than the protectionist measures themselves.

Today’s Must Reads

• United front | Trump’s relations with Google and Facebook is often frosty but the French government’s plan to tax them and other U.S. tech giants is bringing them together.
• Chilly relations | Japanese consumers may face higher bills to stay warm this winter if South Korea bans heating-fuel exports. Add to the worries Japan’s sagging exports.
• Food fight | A key deadline is set to lapse this week that could lead to permanent U.S. tariffs on Mexican tomato imports, with consumers facing higher price tags.
• Israel slows | Global trade tensions took a toll on Israel’s $370 billion economy, chipping away at exports and contributing to a steeper than expected slowdown last quarter.
• Tractor pull | John Deere isn’t selling as many tractors as trade wars rage on and crop prices decline. So the iconic American farm equipment maker is looking for ways to save.

Economic Analysis

• Uncertainty quantified | How Trump can save global growth and reduce uncertainty.
• Busy week ahead | Fed officials head to Jackson Hole with Powell speaking Friday.

Coming Up

• Aug. 20: Taiwan export orders
• Aug. 24-26: G-7 leaders meet in France

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

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