The Malleable Demand for Trade Protection: How Political Campaigns Can Easily Manipulate Public Attitudes Toward Public Policy Posted on January 22, 2019 by Rafael Di Tella and Dani Rodrik

Where does today’s anti-trade sentiment come from? A new study finds that people are particularly sensitive to job losses and outsourcing due to international trade. Protectionist sentiments, the authors find, can be magnified given the right narrative frames.

 In market economies, labor markets are continuously buffeted by a variety of shocks. As demand and supply conditions change, firms adjust by contracting or expanding production, and by moving from one location to another. In the process, workers are laid off and they have to seek employment in other locations or occupations.

By all estimates, international trade and offshoring account for a small proportion of such labor market dislocations. Technological change—automation—and domestic demand shifts are the prime culprits behind both cyclical labor market swings and long-term secular changes such as loss of manufacturing jobs (de-industrialization). Yet, political reaction to job losses tends to focus on international trade, and trade looms much larger in our political debates. We don’t see much political opposition to technology or to shifts in domestic demand patterns.

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