David Dorn, UZH

"Help for the Heartland? The Economic and Political Effects of the Trump Tariffs in US Local Labor Markets"

Abstract

We study the economic and political consequences of the 2018-2019 trade war between the United States, China, and other US trade partners at the detailed geographic level, analyzing both short-run outcomes during the trade war and longer-run effects through 2023/24. US import tariffs did not significantly affect employment or earnings during or after the trade war. Retaliatory tariffs initially reduced employment—especially in agriculture—but harms were partially mitigated by agricultural subsidies and faded over time. Politically, the trade war benefited the Republican party. Residents in tariff-exposed areas showed increased support for tariffs, became more likely to identify as Republicans, and were more likely to vote for Donald Trump in 2020 and 2024. The pattern of tariff-induced Republican gains and limited local employment effects was especially pronounced in regions with greater prior exposure to Chinese import competition, where voters may have valued protectionist action even in the absence of tangible economic benefits.

Contact person: Morten Graugaard Olsen