A month ago Mary spoke with Jon DeVaney of the Washington State Tree Fruit Association in a Policy Today episode about trade.

In the episode, DeVaney mentions that China is a competitor for Washington growers as well as a market. On this point, see also this new USDA report. The report also gets to DeVaney’s points about sanitary and phytosanitary trade barriers: “After the United States negotiated a 1992 memorandum of understanding calling for import inspection and quarantine regulations to be based on sound science, China allowed the import of apples from Washington State in 1993.” But, looking forward, “China is upgrading inspection and quarantine and food-safety testing facilities at ports of entry, which may give an advantage to high-quality products but also could introduce more stringent rules and procedures for entry of fruit.”

During the interview, DeVaney also said, “You’re really not going to protect your way to prosperity.” Indeed, this month the International Monetary Fund considered what would happen if there were a global increase in barriers to trade. If import prices increase by 10 percent, growth would decline by about 2 percent. Additionally, “global consumption falls by a similar amount, with global investment falling by even more.”

In the U.S., Washington would be particularly hard hit, given our dependence on trade. The Peterson Institute for International Economics recently evaluated the trade policies of presidential candidates Clinton and Trump. The report includes the arresting map pictured below, which shows what would happen in the event of a full trade war (defined as occurring should the U.S. impose “a 45 percent tariff on nonoil imports from China and a 35 percent tariff on nonoil imports from Mexico. China and Mexico respond symmetrically, imposing the same tariffs on US exports.”)

The report finds, “Washington State is the worst affected, with 5 percent private sector job loss, followed by California, Massachusetts, and Michigan in the 4.5–5 percent range.”

According to the Peterson Institute report,

In absolute terms, the largest job losses occur in nontrade service sectors, such as wholesale and retail distribution and sales, restaurants, and health care . . . . A trade shock could force the closure of a local factory serving the export market or a local plant that relies on imported inputs (the price of which is now much higher). The fall in employment and income ripples through the community, depressing demand for cars, home improvements, restaurant meals, and purchases of nonessential goods at the local mall. Establishments providing those goods and services cut hours or lay off employees, causing millions of people whose jobs are not associated with international trade to lose their jobs. The devastating effect on nonbusiness services sectors would inflict disproportionate hardship on low-skill, low-income workers.

(Emphasis added.) Regarding the hardships faced by low-income workers, economist Tyler Cowen recently pointed out a study showing that “free trade has been good for the poor.” As the Congressional Budget Office described the study, “low-income consumers in the United States have benefited more from trade than high-income consumers, because low-income consumers tend to spend a larger portion of their income on imported goods whose prices are more likely to fall as a result of trade—specifically, food and clothing.” (This is from a CBO report last month looking at how trade agreements affect the economy. It’s a good general overview. As the CBO notes, “trade encourages a more efficient allocation of resources in the economy and raises the average productivity of businesses and industries in the United States.”)

That free trade helps the poor is not a new concept. Last week Politico’s Morning Trade newsletter mentioned something Walt Whitman said about trade in 1888. The full quote is worth reading (and displaces this from Churchill as my favorite comment on trade). Whitman said,

The spirit of the tariff is malevolent: it flies in the face of all American ideals: I hate it root and branch: it helps a few rich men to get rich, it helps the great mass of poor men to get poorer. . . . It is a robber age: the maxim of the law is, rob or be robbed. Of all robbers I think the tariff is the meanest robber. It has such sneaky, sneaking ways: it hits you in the back—hits you when you ain't lookin': gives you no sort of chance to protect yourself.