Tuesday, April 8, 2025

Totally unfair

Sometimes Donald Trump has said that tariffs are good in themselves and other times he has said that they're just a bargaining chip to get other countries to reduce their trade barriers--that he's working towards free trade.  The one constant is that he believes that other countries have treated us unfairly.  Between 1987 and 2018, there have been a number of survey questions asking if various countries have "fair or unfair trade policies toward the United States."  The list of countries differs, but Canada, Europe*, Japan, Mexico, China, and South Korea have been included pretty frequently.  The figure shows the log of the ratio of "fair" to "unfair" responses (positive numbers on the y-axis mean more people see them as fair; negative mean that more see them as unfair):


Canada is seen most favorably, then Europe, then Mexico and Korea (and India, which was asked about a couple of times), with China at the bottom.  Views of Japan's policy have become substantially more favorable--from 25% fair and 65% unfair in 1987 to 55% fair and 33% unfair in 2018.  South Korea and Europe also seem to have moved upward, while Mexico and China may have moved downward.

The next figure shows the average perceived fairness, adjusted for the nations included in each round (ie, the year effects from a year+nation model). 



It has been higher in the 21st century than in the 1980s and 1990s, although it dropped substantially in 2018.  Unfortunately, the questions weren't asked between 2012 and 2017, so we don't know what people thought during the rise of Trump, and haven't been asked since 2018.  However, the fact that perceived unfairness has been lower in the 21st century--despite the "China shock," the post-2008 recession, and Trump's rhetoric--is important.

On the national differences, most people don't have any direct personal experience on which to base a judgment, so how do they decide?**  In some cases, like Japan in the 1990s and China more recently, there is substantial media coverage.  But the trade policies of Europe, Canada, and South Korea don't generally get much media attention.  An obvious possible influence is general cultural affinity.  Another one is suggested by the upward trends for South Korea and Japan:  people view low prices with suspicion--they figure that someone must be doing something unfair in order to offer them.  So countries that are seen as competing on the basis of quality are viewed more favorably than those that are seen as competing on the basis of price.   



*Under different names:  "Western Europe," then "the Common Market," and more recently "the European Union"
**Don't know answers averaged 13%.  

[Data from the Roper Center for Public Opinion Research]

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