Should-Read: Paul Krugman: The China Shock and the Trump Shock: "The Trump trade war... is looking increasingly likely...
...Claims that there would be huge net job losses are extremely dubious. But what would happen would be a global trade war, which would disrupt the existing economic structure, which is built on elaborate international supply chains.... Some industries, some factories, would end up becoming sudden losers--in the US as well as in developing countries. The lesson... from the widely cited Autor, Dorn, and Hanson paper on the China shock was... the political economy of trade than the sheer pace of change... disrupted local manufacturing concentrations and the communities they supported....
A protectionist turn... would be the same kind of shock given where we are now. It’s like the old joke about the motorist who runs over a pedestrian, then tries to undo the damage by backing up--and runs over the victim a second time. That is... the way to think about the coming Trump shock... produc[ing] exactly the kind of rapid, disruptive shifts in production that fed blue-collar anger going into this election.
