Why Does Import Competition Favor Republicans? Localized Trade Shocks, Voting Behavior, and Scapegoating in the U.S.

Abstract

Evidence that local exposure to Chinese import competition favors right-wing parties has often been attributed to the success of economic nationalism. We advance an alternative account. Trade shocks catalyze cultural backlash, which drives support for conservative candidates, as they compete electorally by targeting out-groups. We test this hypothesis in the 2008-2016 U.S. Presidential elections. First, a quantitative text analysis of campaign speeches shows that Republican candidates moved from support of free trade to protectionism, but they consistently assumed harsher stances on immigration and minority inclusion. Second, using individual-level survey data, we provide evidence that Chinese import shocks drive negative attitudes towards immigrants and minorities. Opinions about free trade are not affected. Finally, a causal mediation analysis highlights that attitudes towards out-groups mediate the effect of localized trade shocks on voting behavior. Altogether, these results point to the role played by trade-induced cultural backlash in shaping political outcomes in the U.S.