News Analysis: Trump's protectionist trade proposals unlikely to help displaced workers but to hurt American consumers

Republican U.S. presidential nominee Donald Trump's protectionist trade proposals are unlikely to help displaced workers in the manufacturing industry, and there's no doubt that American consumers, including many Trump supports, will get hurt by Trump's anti-trade measures, experts have said.

Trump has broken from the longstanding Republican orthodoxy in favor of free trade and embraced a protectionist trade stance throughout his presidential campaign, trying to appeal to angry and frustrated blue-collar voters who have seen manufacturing jobs lose in an increasing global economy.

In a speech accepting the Republican presidential nomination on Thursday, Trump promised to be the voice of those "laid-off factory workers" hit hard by what he called the "horrible and unfair trade deals", and make "fair trade" a central theme to his presidency if elected.

"It begins with a new, fair trade policy that protects our jobs and stands up to countries that cheat. It's been a signature message of my campaign from day one, and it will be a signature feature of my presidency from the moment I take the oath of office," Trump said at the Republican National Convention in Cleveland, Ohio.

Trump also vowed to renegotiate the North American Free Trade Agreement (NAFTA) and other existing major trade deals, and promised to never sign massive trade agreements like the Trans-Pacific Partnership (TPP), which he said would "destroy" U.S. manufacturing, as part of an effort to restore American jobs.

"I am going to bring back our jobs to Ohio, and Pennsylvania, and New York, and Michigan and to all of America -- and I am not going to let companies move to other countries, firing their employees along the way, without consequence," he said.

But experts said that the decline in American manufacturing employment is a natural phenomenon and blaming trade agreements for the job destruction misrepresents what is actually happening.

"There is a long-term trend for manufacturing employment in the United States to decline as a share of employment. This reflects the fact that automation and productivity growth are easier in manufacturing than in services," said David Dollar, a senior fellow at the Brookings Institution and a former official of the World Bank.

"The United States is still a manufacturing powerhouse from the point of view of production, but it simply does not take that many workers to produce the output," Dollar said, suggesting that increasing public spending on infrastructure would be the most obvious measure to create jobs immediately and enhance the productivity of the economy.

"The presidential candidates often use the so-called demise of manufacturing and the shift away from traditional factory floor jobs to make their case against trade. But the facts get in the way," echoed Thomas Donohue, president and chief executive of the U.S. Chamber of Commerce.

While some industry jobs have been lost due to technology and efficiency, Donohue said trade remains a strong driver of manufacturing jobs, citing of the fact that exports support approximately 6 million U.S. factory jobs, roughly half of all manufacturing employment.

Although Trump has vowed to punish U.S. companies that move abroad, economists are skeptical about his plan to bring manufacturing jobs back to the country due to higher labor and supply chain costs.

Consulting firm A.T. Kearney said in a December report that its reshoring index shows that, for the fourth consecutive year, actual reshoring of manufacturing operations to the United States has once again failed to keep pace with offshoring.

"The reshoring phenomenon appears to have been more a one-off aberration than an inexorable trend," the report said, noting that industries avoiding rising labor costs in China have been successfully relocating to other Asian countries rather than returning to the United States.

Ironically, even Trump couldn't stick to his promise to have more products made in the U.S. when it comes to his own businesses.

Robert Lawrence, a professor of international trade and investment at Harvard University, found that most of the products advertise on Trump.com were made overseas.

"Of the 838 Ivanka products advertised through the site, none appear to be made exclusively in the U.S.; 628 are said to be imported and 354 made specifically in China," Lawrence wrote in an analysis of the Ivanka Trump brand merchandise in March.

That's because it would be more expensive to buy American-made products. A recent article in MIT Technology Review calculated that if the Apple iPhone 6s plus were made entirely in the U.S. of U.S.-sourced components, it would cost between 809 and 849 dollars instead of the current price of 749 dollars.

Economists have also warned that Trump's proposed high tariffs on other countries could drag the U.S. economy into a prolonged recession and cause heavy job losses that would fall hardest on low- and middle-income workers.

"Even if Trump could raise tariffs sharply against China and Mexico, there would be little or no benefit for U.S. production and jobs," said C. Fred Bergsten, director emeritus of the Peterson Institute for International Economics.

The U.S. could lose many more jobs on the export side than any it might gain on the import side if other trading partners retaliate with high tariffs of their own, he noted.

"It is obvious that consumers, already hard pressed by weak income growth, would see their buying power further constrained. But many would also discover their jobs are threatened," Lawrence said, adding that Trump's tariffs would wreak havoc with global supply chains and force many companies to reduce employment.

"Trump's trade policy, far from enabling the United States to 'win again', would be a sizable loser," Bergsten said.

Moody's Analytics estimated in a recent report that the U.S. economy could suffer a lengthy recession with nearly 3.5 million job losses and a 7 percent unemployment rate at the end of Trump's four-year presidency if all his economic proposals are adopted.

"Broadly, Mr. Trump's economic proposals will result in a more isolated U.S. economy," the report said. "During Mr. Trump's presidency, the average American household's after-inflation income will stagnate, and stock prices and real house values will decline." Endit