Wisconsin Goods Exports during the Trump Trade War

Even before Covid-19 struck, Wisconsin exports were declining despite a sideways-trending dollar…

Figure 1: Real “exports” of goods originating in Wisconsin, deflated by US PPI-all commodities in millions 1982$ (blue, left log scale), and real export-weighted value of US dollar for Wisconsin, 1988=100  (red, right low scale). Light orange shading denotes Trump administration, orange dashed line denotes March 2018 when Section 232 and Section 301 measures are announced. Green dashed line at February 2020. Source: Bureau of Census via FRED, Dallas Fed, and author’s calculations.

While Wisconsin export growth stalled during the dollar appreciation of 2014-15, growth went negative in the wake of the announcement of Section 232 and Section 301 measures, even with a fairly steady dollar. That’s suggestive of a failure of the Trump browbeating approach to trade policy – retaliation (and associated heightened economic policy uncertainty) did Wisconsin no favors in the export realm.

The following caveat is necessary when examining these data, as the series does not represent necessarily production in Wisconsin. From the data description:

The series DOES NOT represent the production origin of U.S. export merchandise. In some cases considerable manufactured exports are attributed to states that are known to have little manufacturing capACElity. One reason is that commodities produced by out-of-state suppliers can be shipped from in-state distribution centers. Another factor is shipments of manufactured commodities from in-state warehouses and other distribution centers that are arranged by exporters located out-of-state. In both cases, manufactured exports from the non-industrial state are magnified in the OM series.

 

6 thoughts on “Wisconsin Goods Exports during the Trump Trade War”

  1. Moses Herzog

    I’m hopeful to see Beijing make the first move. Although they can argue America shoved first and started the fight, I think even they have to admit trump is/was the main protagonist. With that in mind Beijing should make the first move to ease up on tariffs. It doesn’t have to be something big, just a small “gesture” to get the ball rolling. Chinese are pragmatic if nothing else, surely a gesture of goodwill via a letdown on tariffs/quotas that in fact serves themselves is not beyond their capacity to see beyond obsessive nationalism. Or they can go on being d*ckheads and see how that serves them on the world stage. In this particular moment I can’t pretend I care that much.

    1. Moses Herzog

      I should clarify my comment a little. When I say ” I think even Beijing has to admit donald trump is/was the main protagonist.” What I am meaning to say is, 98% of the time a sitting U.S. President (“Sitting U.S. President” read as “a typical American government) wouldn’t have unilaterally backed out of trade treaties or slammed on tariffs arbitrarily. So……. China’s trade advisers and trade negotiators should think of it in these terms or in this aspect.

  4. pgl

    Kevin Drum is trying to make a good point about the reported inflation rate on CPI-U but he is making this too hard:

    https://jabberwocking.com/the-inflation-rate-in-may-was-either-5-or-3-5/

    From May 2020 to May 2021, this index rose by 4.93% (almost 5%) but from Feb. 2020 to May 2021 (a 15 month interval), it rose by only 3.75%. Annualized the inflation rate is only 3% not 3.5%.

    So important point Kevin but please throw away your confused calculator.

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