The economic policies championed by the current US administration, particularly its trade strategies, are increasingly inflicting damage on the very constituencies that propelled President Trump into office, according to a leading economist. Penny Goldberg, former chief economist at the World Bank and a professor at Yale University, argues that the consequences of the initial tariff wave targeting China have disproportionately impacted regions populated by Trump’s core voter base.
Goldberg’s analysis, detailed in a recent interview, focuses on the retaliatory measures taken by China, notably the imposition of substantial tariffs on American agricultural products. Farmers, a key demographic within Trump’s support, have borne a significant burden, with many facing what Goldberg describes as “an existential crisis” due to the disrupted trade. This contradicts the administration’s repeated claims that trade barriers would invigorate American industry and generate employment.
Goldberg challenges the fundamental premise of the administration’s economic vision, stating bluntly that “you can’t have T-shirts made in the US for five euros”. Beyond the uncompetitive nature of reshoring certain industries, she highlights the accelerating role of automation – robotics and artificial intelligence – as a primary driver of job displacement within the US, further undermining the promise of increased domestic employment.
A crucial and often overlooked aspect, Goldberg observes, is the disconnect between perceived economic anxieties and the practical benefits derived from international trade. While many Americans express concerns about China’s economic success, they often fail to recognize the role that relatively inexpensive imports from China have played in maintaining their current standard of living. This ignorance, she suggests, will likely result in a tangible decline in the living standards of many American households as a result of protectionist measures. The situation presents a complex political conundrum: policies ostensibly designed to appease a loyal base are, in reality, eroding their economic stability, highlighting a critical misalignment between political rhetoric and economic reality.