International trade directly influences US presidential elections. We explore the electoral implications of the increasing tradability of services and the large US surplus in services trade. Our paper builds on prior work showing that job insecurity from import competition in manufacturing diminishes political support for incumbents. We construct novel measures of the tradability of an industry using establishment-level data covering nearly all US economic activity. We find increases in incumbent party vote shares in counties with large numbers of workers in high-skilled tradable services as well as goods, and decreases in counties with high employment in low-skilled manufacturing. Incumbent parties are particularly vulnerable to losing votes in swing states with many low-skilled manufacturing workers. In national-level models, we show for the first time that increasing imports (exports) are associated with decreasing (increasing) presidential incumbent vote shares. The national-level effects are large and politically consequential. We also find an Electoral College incentive to protect the manufacturing sector and to oppose trade agreements.

While increasing trade and foreign direct investment, international trade agreements create winners and losers. Our paper examines the distributional consequences of preferential trade agreements (PTAs) at the firm level. We contend that PTAs expand trade among the largest and most productive multinationals by lowering preferential tariffs. We examine data covering the near universe of US foreign direct investment and disaggregated tariff data from PTAs signed by the United States. Our results indicate that US preferential tariffs increase sales to the United States from the most competitive subsidiaries of multinational corporations operating in partner countries. We also find increases in market concentration in partner countries following preferential liberalization with the United States. By demonstrating that the gains from preferential liberalization are unevenly distributed across firms, we shed new light on the firm-level, economic sources of political mobilization over international trade and investment policies.

A populist backlash to globalization has ushered in nationalist governments and challenged core features of the Liberal International Order. Although startling in scope and urgency, the populist wave has been developing in declining regions of wealthy countries for some time. Trade, offshoring, and automation have steadily reduced the number of available jobs and the wages of industrial workers since at least the 1970s. The decline in manufacturing employment initiated the deterioration of social and economic conditions in affected communities, exacerbating inequalities between depressed rural areas and small cities and towns, on the one hand, and thriving cities, on the other. The global financial crisis of 2008 catalyzed these divisions, as communities already in decline suffered deeper and longer economic downturns than metropolitan areas, where superstar knowledge, technology, and service-oriented firms agglomerate. We document many of these trends across the United States and Europe, and demonstrate that populist support is strongest in communities that experienced long-term economic and social decline. Institutional differences in labor markets and electoral rules across developed democracies may explain some of the variation in populists’ electoral success. Renewed support for the Liberal International Order may require a rejuvenation of distressed communities and a reduction of stark regional inequalities.

We apply insights from "new, new" trade theory to explain a puzzling decline in US firm antidumping (AD) filings in an era of persistent foreign currency undervaluations and increasing import competition. Firms exhibit heterogeneity both within and across industries regarding foreign direct investment (FDI). We propose that firms making vertical or resource-seeking investments abroad will be less likely to file AD petitions, and firms are likely to undertake vertical FDI in the context of currency undervaluation. Hence, we argue, the increasing vertical FDI of US firms makes trade disputes far less likely. We use firm-level data to examine the universe of US manufacturing firms and find that AD filers generally conduct no intrafirm trade with filed-against countries. We also find that persistent currency undervaluation is associated over time with increased vertical FDI and intrafirm trade by US multinational corporations (MNCs) in the undervaluing country. Among larger US MNCs, the likelihood of an AD filing is negatively associated with increases in intrafirm trade. In the context of currency undervaluation, we confirm the existing finding that undervaluation is associated with more AD filings. We also find, however, that high levels of intrafirm imports from countries with undervalued currencies significantly decrease the likelihood of AD filings. Our study highlights the centrality of firm heterogeneity in international trade and investment in understanding political mobilization over international economic policy.

What is the effect of the COVID-19 pandemic on the 2020 US presidential election? Guided by a pre-analysis plan, we estimate the effect of COVID-19 cases and deaths on the change in county-level voting for Donald Trump between 2016 and 2020. To account for potential confounders, we include a large number of COVID-19-related controls as well as demographic and socioeconomic variables. Moreover, we instrument the numbers of cases and deaths with the share of workers employed in meat-processing factories to sharpen our identification strategy. We find that COVID-19 cases negatively affected Trump's vote share. The estimated effect appears strongest in urban counties, in states without stay-at-home orders, in swing states, and in states that Trump won in 2016. A simple counterfactual analysis suggests that Trump would likely have won re-election if COVID-19 cases had been 5 percent lower. We also find some evidence that COVID-19 incidence had a positive effect on voters' mobilization, helping Biden win the presidency.