The Shifting Geography of Protectionism

Editor’s note: The Liberal Patriot is excited to welcome Justin Vassallo as a regular contributor to the publication. As you’ve seen over the past year, Justin is a superb writer and analyst and will now host a regular Monday column for us focused on political economy, industrial policy, and American political development.

Our great colleague Nate Moore is headed off to law school soon but will still write occasional data and political pieces for TLP. Please welcome Justin to TLP—and best of luck to Nate!

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The spiraling uncertainty caused by Donald Trump’s tariff brinksmanship has quickly diminished his administration’s public approval. Recent polling by Gallup shows that an overwhelming majority of Democrats and independents believe tariffs will mean higher prices, and that only 25 percent of all U.S. adults think they are “very likely” to yield more manufacturing jobs.

For some analysts partial to globalization, this is welcome proof that support for industrial protectionism is paper thin outside a smattering of Rust Belt counties, despite it being Trump’s signature economic issue. Swing voters are especially fickle and selectively absorb rhetoric and policy stances, the thinking goes; because they were frustrated most with the Democratic response to inflation, these voters were deaf to Kamala Harris’s warning that Trump’s tariff zeal was tantamount to pledging a steep national sales tax.

Then again, it is remarkable that in 2024—not 2004 or 1992, when at least five million more manufacturing jobs were at stake—over 77 million ballots were cast for the most explicitly protectionist platform since the 1920s. Clearly, the state of the country’s industrial base is not a niche concern tied exclusively to the auto industry, steel, and a handful of other sectors beleaguered by China’s relentless export capacity. Throughout the country, there appears to be a strong desire to “rebalance” the economy and lessen America’s dependence on global supply chains, even if many voters now regret empowering Trump to act on the world stage as he has.

This raises the question of why antipathy towards “free trade” remains so salient—and whether the new politics of protectionism is more diffuse than commonly assumed. While it is easy to discern why NAFTA and Permanent Normal Trade Relations (PNTR) with China had a debilitating impact on the industrial Midwest that continues to provoke blue-collar ire toward the political establishment, appeals to economic nationalism resonate well-beyond this critical swing region. Indeed, they correspond to the broader regional divide that has defined U.S. politics for nearly three decades; in many instances globalization stunted the growth of micropolitan manufacturing, thereby concentrating economic gains in affluent districts that had better adapted to changes in the global trade order.

At the same time, protectionist sentiment has been conditioned by the shifting loci and composition of American manufacturing, which has become more contingent on foreign-inputs and foreign direct investment. The auto sector itself is emblematic of that dynamic, as demonstrated by the increase in foreign-owned plants in South Carolina, Alabama, Tennessee, and Georgia and the upper Midwest’s cross-border supply chains.

This complexity has accentuated the dilemma facing those seeking to reverse America’s shrunken share of global manufacturing. Whereas there were once districts that sought specific trade controls—first in the Northeast, then in the textile hubs of the postwar Southern piedmont—the ramifications of technological change and global trade have made the geography of protectionism much more volatile and fractured. Working-class communities are torn between preventing further import shocks through tariffs and other trade restrictions and weathering the difficult transition to alternate supply chains that such barriers would bring about.

Moreover, the desire for the old markers of working-class prosperity—high wages and company benefits, strong downtowns and civic associations, home ownership, and effective union representation—is not necessarily the same as nostalgia for arduous factory work that no amount of tariff duties will bring back. Towns and cities that have suffered heavily from offshoring intuit that reclaiming the country’s industrial heritage has to be accomplished through policies that combine support for traditional craftmanship and vocational training with massive capital expenditures in innovation, energy security, and modern infrastructure. Their residents want the economic diversification they’ve been denied since the turn of the century—not a choice between low-wage dollar stores and obsolescent smokestacks.

Understood this way, the willingness to test protectionism is much less reflective of workers sharing Trump’s reckless instincts than an acute need for investments that finally reignite productivity in forgotten regions.

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There has been a recurring debate about the fundamental merits of protectionism since the country’s founding. And there has always been a tension between the vision of national progress that protectionists propound and the reality that the scope and purpose of protective measures are usually defined by the distinct regional economic interests seeking them. This is why protectionism arouses such intense arguments for and against its contributions to development and shared prosperity. Depending on the context, protectionism can either be harnessed for legitimate and socially-inclusive development goals or exploited by rent-seeking “crony capitalists.” Of course, as America’s own path to industrialization reveals, protectionism can lead to both of these outcomes simultaneously.

The geography of protectionist sentiment has also swayed with the changing fortunes of American industry, technological advances, the dispersal of lower-value-added industries to less-developed regions, and the repeated failures of U.S. labor-market policy. Historically, protectionism had a strong sectional character that separated the mercantilist North and agrarian South, with the Midwest and West oscillating in their preferences. Later in the New Deal era and early postwar period American consumers and workers in industries with strong export demand embraced international trade. However, multiple stages of deindustrialization soon gave rise to “Buy American” campaigns and various efforts by struggling sectors and workers to restrict cheap imports. The electorate has been divided since about the benefits of additional trade agreements in a way that transcends the old “sectional” divide but also echoes that epoch’s frictions and battles over the country’s path to development.

In the antebellum era, the nascent “American system” of political economy—predicated on tariffs for infant industries, manufacturing subsidies, internal improvements, patent development, and education in the industrial arts—favored the proliferating industrial centers of the Northeast over the slave-holding South, which was oriented primarily to cotton exports. The protectionist dispensation then decisively won out after the Civil War and was adhered to by Northern Republican congressmen and their core constituencies well into the early 1900s. Given the collapse of their economic model and widespread poverty, white Southerners of all classes generally loathed the tariff regime and its barely disguised sectional bias.

Elsewhere, however, the pace of industrial growth, rising prosperity, and the spread of household appliances and modern leisure appeared to validate the importance of protection. Though not without populist agitation, especially during the 1890s depression, the farm regions of the greater Midwest generally acquiesced to the tariff wall constructed by statesmen such as Vermont Senator Justin S. Morrill and William McKinley. Immigration and rapid industrial growth combined to swell demand for foodstuffs that compelled advances in mechanized production. These emerging economies of scale, buttressed by a push toward product standardization, fostered America’s increasing export advantage in raw materials, machinery, and consumer goods.

Apologists of Trump’s tariff strategy cite this capsule history to argue America can and should recreate the home market of the second industrial revolution and compete with emerging economies. One major problem with this outlook, however, is that multisector “import substitution” is widely considered to be a linear, early phase of development. Setting aside the role of the dollar as the global reserve currency (which has undercut the competitiveness of American exports), there is no proven template for reindustrialization based on simply deploying the same heavy-handed tools of the distant past—even if some are necessary on national security grounds or can be temporarily justified as part of a broader policy package for struggling regions.

Furthermore, when America became a manufacturing juggernaut it had fewer international rivals to contend with. This was an auspicious but historically-contingent opportunity for the trailblazers of America’s advanced industries. Pioneers like Henry Ford not only developed new production techniques, they modernized the corporations and business relations that comprised regional manufacturing belts. But after decades of outsourcing and the rise of “concentrated” foreign supply chains, comparatively few of today’s domestic firms are structured to replicate the mass production of mid-twentieth century America, let alone compete successfully with China, Vietnam, India, and other countries that have far lower labor costs and negligible regulations.

Another deficit of Trumpian mercantilism is that it obfuscates the social and political tensions that protracted high tariffs exacerbated and are likely to foment again. A successful long-term industrial strategy draws in diverse interest groups that perceive new opportunities and net improvements to the general welfare, if not always perfectly symbiotic benefits. While the Republican Party circa 1880-1930 could claim credit for accelerating America’s economic development, unchecked protectionism created and favored monopolies at the expense of consumers, the labor movement, smaller firms, and underdeveloped regions. MAGA protectionists forget that excessive tariffs were a growing political liability by 1910, and that Republican success in the pre-New Deal period hinged in part on the disarray of a Democratic coalition that had not yet made “liberalism”—meaning collective bargaining rights, social insurance, Keynesian demand-management, and pro-development antitrust enforcement—its lodestar.

A better reference for would-be producerists might be the succession of industrial policies conceived by import-sensitive unions and sympathetic liberals in Congress in the 1970s and early 1980s. Demands for import quotas, repatriated foreign earnings, expanded trade adjustment assistance, and sector-specific tripartism drove the protectionist turn during that first major wave of deindustrialization. At the time, most of corporate America was hostile to such proposals. But if paired with generous worker training programs and stringent, sensible criteria for pro-manufacturing subsidies, some of these ideas could be adapted to a more-nimble industrial strategy that supports domestic production, including revamping select legacy sectors, without antagonizing Canada, Mexico, and other close allies.

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In other respects, however, the 1970s are a cautionary tale about the difficulties in forging a regionally diverse “protectionist” bloc. Ironically, the new, more populist push for protection, now from the labor-left, originated in many of the same regions and sectors that first profited from it under Republican rule, including coastal metros that eventually reinvented themselves as global tech and financial hubs.

Simultaneously, the South, arguably the strongest beneficiary of postwar growth after California, emerged as an important but increasingly ambivalent player in postwar trade. Having capitalized on both New Deal development programs and the wage differential with the more unionized North, Southern Democrats wary of rising import competition became much more inclined toward protection than their forefathers had been. In fact, prominent Democrats such as Rep. Wilbur Mills of Arkansas and Sen. Fritz Hollings of South Carolina became some of the most vocal advocates of shielding mid-size manufacturers and preventing offshoring to East Asia and Latin America.

By the same token, the “catch-up” logic which animated the Sunbelt dictated maintaining an openness toward enterprise, domestic and foreign, that diverged from the priorities and calculations of Northern districts suffering most from plant closures. And because of the region’s low union density, the South lacked the grassroots pressure that might have complemented Northern unions’ ill-fated push for a new national trade and reinvestment program. The Democratic Party’s drift in the Reagan era didn’t help matters. Though protectionist ideas were embraced by high-profile Democrats as different as Hollings, Jesse Jackson, Missouri Rep. Richard Gephardt, and Massachusetts Sen. Paul Tsongas, Walter Mondale’s bloodless case for reviving the industrial Northeast, tabled during the 1984 campaign, magnified the challenges of translating industrial policy into a popular cause that transcended regional differences.

Both the economic and partisan patterns of the last three decades continued to thwart a cohesive movement toward a national industrial strategy. The end of the Cold War appeared to vindicate the postwar trade system America had spearheaded, while globalization and the tech boom promised plenty of a magnitude that would obviate older, “statist” interventions in economic affairs.

That hubris was compounded by ideological dogma and cross-partisan belief in the efficacy of “Econ 101.” After the 1994 midterms, the GOP’s congressional wing was hijacked by their anti-government fringe, thereby precluding any purposeful action on that side of the aisle to secure America’s industrial base. Their counterparts at the state-level mainly proffered tax cuts as a way to recruit or retain corporate investment, and transformative investments like those of BMW in South Carolina were more the exception than the rule. By contrast, the Democratic Party was more conflicted over how to manage globalization, given its important though increasingly strained ties to the labor movement. Yet its emphasis on smoothing the transition through the safety net—a strategy that researchers now call “compensating the losers”—belied the idea that a comprehensive industrial strategy was in the cards.

To be sure, the high tide of globalization was not entirely devoid of deliberate regional investments, though these lacked a flagship program or unifying theme. To some extent the Democrats’ deepening alliance with Silicon Valley yielded a highly-tailored form of “developmentalism” based not in producing electronics and advanced tech at home but in swelling the population, property values, and concentration of educated professionals in coastal metros. That fed a construction boom in corporate campuses and high-rises in zip codes undergoing rapid gentrification while reinforcing demand for advanced degrees. The Affordable Care Act was another discreet type of industrial policy insofar that it encouraged sector-wide investments and job-training to meet the demand created through expanded insurance coverage.

But neither of these trends addressed the working-class job crisis pervading what had become multiple Rust Belts, from upstate New York to Southern Appalachia. Nor did they present a solution to newer challenges symptomatic of rising inequality, most centrally the affordable housing shortage.

Joe Biden’s administration, of course, marked the party’s unexpected “back to the future” moment on industrial policy. Trump’s ascent reflected many of globalization’s unmet promises and ignored challenges, and the conjunction of his chaotic first term with the pandemic created an opening for Democrats to rethink some of the assumptions that had guided them in recent decades. In his most lucid moments Biden acknowledged this. “A lot of Democrats are getting mad at me because we’re investing actually more in red states than blue states right now,” he remarked in 2023 speech at a Wisconsin plant. “But they’re all Americans, and I made a promise.”

Alas, Biden underestimated the extent to which the party system had changed since the Seventies. Divergent regional outcomes, reinforced by overwhelming Democratic margins in large metros driven by tech, finance, and services, made the idea of a shared national economic vision more elusive than ever. Despite his intentions, Biden wasn’t fit to make a compelling case. He also struggled to parry skepticism from within his party. The seeming-stasis of regional polarization, certain establishment and progressive figures concurred, meant it was risky to try to woo back Rust Belt voters with new manufacturing subsidies and “Buy American” measures.

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Since the 2024 election many Democrats and their allies have concluded “Bidenism” was a misguided experiment. Ardent protectionism is isolated to an archipelago of factory towns and small cities that are overwhelmingly for Trump; even if Democrats were to win them over, these demographics would be a costly coalition partner to maintain. According to this view, Trump’s blanket tariffs and purportedly more progressive industrial policies entail the same risks. Both threaten to undermine the country’s overall economic dynamism by “privileging” regions that want to “inflate” costs for goods that American consumers and firms could source more efficiently from abroad. Ergo, all protectionism is inherently backwards-facing.

Beyond mistaking what an intelligent industrial policy aims to do, this reasoning assumes that productivity, investment, and welfare-enhancing technology can be left alone to the market. It also discounts why we are here. Although Biden’s advisors were overoptimistic about the rollout and impact of his policies, they had at least diagnosed the fundamental problems their party—and the country—must overcome. Successive trade shocks and a political economy heavily skewed toward short-term financial returns have created an almost binational electorate that cannot be explained as simply the product of racism or “blue-collar authoritarianism.” On top of Trump’s surprising gains with minorities, recent research suggests that NAFTA greatly accelerated Southern defections from the Democratic Party at the congressional and state levels. Had the national party been more determined to reconcile the old industrial core and the Sunbelt in an earlier period, and had Democrats not forfeited dozens of seats and counties since the early 2000s, Biden’s gambit to outflank Trump’s economic nationalism may have not seemed so far-fetched.

Of course, the speed with which Trump’s tariffs have sunk consumer expectations may mark a turning point in America’s longstanding debate over protectionism. Decades of rising inequality has made even well-off Americans anxious about their future. As militant climate activists have learned, many people are unwilling to bear policies that connote “shared sacrifice’’—particularly if the ends are poorly articulated or seem unlikely to put the country on better footing for the long-term. The prospect of a harsh recession—the first not precipitated by a specific crisis since the dot-com bust of 2000, and one “self-inflicted” at that—could discredit industrial policy more broadly for a generation. Indeed, the very workers Trump claims to stand for may already be caught in the crosshairs of his trade war.

But if Trump’s endurance is any indication, the pain caused by offshoring will remain potent and continue to decide key elections. Progressives who recognize this should do all they can to plot the map of genuine economic renewal.