Working Paper: CEPR ID: DP14091
Authors: Emily Blanchard; Chad P. Bown; Davin Chor
Abstract: We uncover evidence that the US-China trade war was consequential for voting outcomes in the 2018 congressional midterm election. Republican House candidates lost support in counties more exposed to tariff retaliation, but saw no appreciable gains in counties that received more direct US tariff protection. The electoral losses were only modestly mitigated by the US agricultural subsidies announced in summer 2018. Republicans also fared worse in counties that had seen recent gains in health insurance coverage (where efforts to repeal the Affordable Care Act may have been more consequential), and where a new federal cap on state and local tax (SALT) deductions disadvantaged more taxpayers. Counterfactual calculations suggest that Republicans would have lost ten fewer House seats absent the trade war, in a similar range to the number of lost seat for which either health care or SALT can account.
Keywords: trade war; trade policy; retaliatory tariffs; agricultural subsidies; health insurance coverage; voting
JEL Codes: F13; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exposure to retaliatory tariffs (F69) | Republican vote share (D72) |
| Agricultural subsidies announced in summer 2018 (Q18) | Republican vote share (D72) |
| Recent gains in health insurance coverage (I13) | Republican vote share (D72) |
| Trade war exposure (F19) | Republican vote share (D72) |