The Trump administration last week slapped new tariffs on foreign companies that export washing machines and solar energy cells and panels to the United States. The White House suggested more protectionist tariffs could follow.
Domestic manufacturers stand to benefit, as import fees drive up the cost of foreign washing machines and solar energy cells and panels. In fact, share prices for some of these companies have already gone up. But higher tariffs come at a cost: Consumers and domestic installers will lose money as a result of these higher prices.
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Are there political winners and losers, as well? Several scholars documented “particularism” in the American presidency — the tendency for chief executives to implement public policy in a way that benefits them electorally across states and districts. How about President Trump’s tariffs?
This is how we did our research
In a recently published study, we examined who benefits when presidents impose tariffs by proclamation. First, we collected data on all unilateral changes in trade policy made by a president between 1917 and 2006, drawing from the American Presidency Project and scholarship on presidential power. We then identified which of these unilateral actions restricted imports.
Next, we identified who benefited from these tariffs. That can be tricky. Fortunately, a variety of government documents routinely rank the top five states in production quantity, industry employment and more. For example, President Ronald Reagan extended special import protections for domestic steel producers in 1987 with Proclamation 5679; in that year, the Census of Manufactures identified the five states with the most primary and secondary steel-manufacturing activity.
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We then used state-level trends in Republican or Democratic presidential success to check each president’s expected electoral position in each state, based on popular vote totals for the two major parties during the previous three presidential elections. More specifically, we divided states into three groups. Core states were those in which the president’s party had won on average more than 55 percent of the popular vote. Swing states were those in which the president’s party had won on average between 45 and 55 percent of the vote. Hostile states were those in which the president’s party had won on average less than 45 percent of the vote.
We found that presidents like tariffs. Beginning with Woodrow Wilson in 1917 through George W. Bush in 2006, we counted 191 total instances of protective tariffs imposed by proclamation — or almost 13, on average, by administration. Dwight Eisenhower was far and away the leader, issuing 35 protective tariffs during his two terms.
Here is what we learned about presidential protectionism
Trump’s tariffs are unusual in a couple of ways. Unlike Trump’s, most protectionist tariffs were imposed during presidential election years. Changes to tariff schedules imposed during midterm election years, like this one, are typically less likely to be protectionist. But Trump’s move is not unusual in this sense: Presidents are more likely to impose protectionist tariffs when their party controls both chambers of Congress.
We looked more closely at presidents’ unilateral trade adjustments in modern times, between 1986 and 2006. We found that outside of presidential election years, there’s no clear electoral pattern in which states benefit. Swing and hostile states are no more likely to receive a protectionist tariff than are presidents’ safest states.
But in presidential election years, the pattern looks different. In those years, presidents impose tariffs that will benefit swing and hostile states — perhaps hoping to boost their vote totals in those states. But we find no evidence that presidents impose tariffs with an eye to helping members of their party in Congress — in any election year. Simply put, the president’s co-partisans in both the House and Senate do not appear to benefit from the president’s discretion over trade barriers.
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Are Trump’s tariffs unusual?
The chairman of Whirlpool, a U.S. company that makes washing machines, recently suggested that the new washing machine tariff would result in new manufacturing jobs in the swing state of Ohio as well as in some core Republican states. In that sense, Trump’s decision to impose tariffs follows through on populist pledges to expand manufacturing jobs that will help his electoral base.
Yet none of the top five states in solar-panel manufacturing — California, North Carolina, Arizona, Nevada and New Jersey — are core states for Trump. First Solar has its North American manufacturing facility in the perennial swing-state of Ohio, and its headquarters is in Arizona — where the 2018 Senate race is a toss-up. The two companies that requested the tariff, Suniva and SolarWorld USA, are headquartered in Georgia and Oregon, respectively. Georgia is a core state for Trump, whereas Oregon is a hostile state.
Some of the largest solar companies in the United States, however, manufacture their products abroad and bring in their revenue from installation. Many of these companies are headquartered and do much of their business in California, including Solar Universe, PetersenDean, SunPower and SolarCity. What’s more, solidly Democratic state governments — including those in California, Connecticut, Illinois and Massachusetts — have enacted generous subsidies to make solar power more affordable for consumers. Reduced sales from rising prices could further damage the bottom line of companies that depend on installation fees in these blue states.
So although the new tariffs seem to track Trump’s campaign rhetoric, their initial impact could help producers in states that are politically vital to him, while hurting manufacturers in politically hostile ones.
Summing up, Trump’s tariffs exhibit definite hallmarks of presidential particularism. At the same time, the tariffs were rolled out well in advance of the next presidential cycle — contrary to our expectations. More generally, though, Trump’s protectionist measures support the growing literature suggesting that presidents, like Congress, pick winners and losers within the United States strategically, rather than simply tending to the whole nation.
Kenneth Lowande is a fellow in the Center for the Study of Democratic Politics at Princeton University. Starting fall 2018, he will be an assistant professor of political science at the University of Michigan.
Jeffery A. Jenkins is the Provost Professor of Public Policy, Political Science and Law; the Judith & John Bedrosian Chair of Governance and the Public Enterprise; and director of the Bedrosian Center at the Sol Price School of Public Policy at the University of Southern California.
Andrew J. Clarke is an assistant professor of government and law at Lafayette College.