These two maps show how the trade war with China is hurting ‘Trump country’
Published: Oct 9, 2019 1:22 p.m. ET
New study finds tariffs are taking their toll in battleground Midwestern states
 MarketWatch illustration/iStock Photo/Getty Images
The Upper Midwest and swing states or ’Trump country’ are hit the hardest by the trade war with China, according to Michael Waugh, a professor at New York University’s Stern School of Business.
 By
BrettArends
Columnist
The costs of the trade war with China are being borne most heavily in parts of so-called “Trump country” that are expected to be key battlegrounds in next year’s presidential election.
The Upper Midwest and swing states are hit the hardest, Michael Waugh, a professor at New York University’s Stern School of Business, and the author of one of the new studies, told MarketWatch. “These results suggest that Chinese retaliation is leading to concentrated welfare losses in the U.S.,” he wrote. Waugh describes those states as or “Trump country.”
New car registrations, a measure of local consumer spending and confidence, have slowed or declined in so-called red states and are most exposed to China’s retaliatory tariffs, Waugh found in the study distributed by the National Bureau of Economic Research. Those states include Michigan, Wisconsin, Pennsylvania and Ohio, which have 64 electoral votes between them.
See also: Trump’s Mexico tariffs could drain jobs from America’s economy
Red states appear to be more vulnerable to economic upheaval resulting from the prolonged trade war with China. Earlier this year, Experian ranked 2018 credit scores by state: Massachusetts, Minnesota, Vermont, New Hampshire, South Dakota came out on top with scores of 703 or more. Hillary Clinton won all those states except South Dakota in the 2016 presidential election.
At the other end of the spectrum: Nevada, Georgia, Mississippi, Texas, Louisiana ranked lowest with scores of 659 or lower. Clinton took Nevada, but the other four states were won by Donald Trump in 2016. Analysts typically say that the higher the ratio of your debt to your credit limit, the more that will adversely effect your credit score.
Waugh’s study tracked data until January, so it missed the latest tariffs. The typical U.S. household will pay $831 more a year due to rising tariffs, a May 2019 New York Federal Reserve Bank study found. The tariffs amount to a tax hike of $86 billion, and will cost about 194,000 jobs, according to an analysis by the Tax Foundation, a low-tax, free-market Washington, D.C.-based think tank.
Further tariffs threatened by the administration, and retaliatory tariffs by China, the EU and others could end up costing Americans about $233 billion in a year in extra taxes and lost exports, it adds. Michigan, Wisconsin, Pennsylvania (all won by Trump in 2016) are major manufacturing states, Matt McAlvanah, a spokesman for trade group Tariffs Hurt the Heartland, said last month. |
