A recent Wall Street Journal-NBC Newspoll showed that Republicans are feeling a lot less warm and fuzzy about free trade.
When asked about foreign trade, nearly 60% of participants responded that they think foreign trade has been bad for the U.S. economy, because it "reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products."
Let's put aside the "unsafe products" issue for the moment. That's a very current events, front-page issue right now, as toy makers like Mattel (NYSE:MAT) and RC2 (NASDAQ:RCRC) have recently recalled toys made in China because of lead paint concerns.
Amid an increasingly unsteady U.S. economy, it seems like a particularly inopportune time for Americans to get all uppity and protectionist. As the housing market and credit crunch continue to squeeze U.S. consumers, we may be looking more and more to foreign spenders to supplement our weakening domestic spending. But if we tighten the screws on foreigners selling into the U.S., those same countries may turn around and tell us to back off when it comes to selling in their countries.
And let's not forget the magic that foreign imports create when it comes to discount shopping at stores like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT). Those low prices will look particularly tasty to American shoppers if they have to continue tightening their collective purse strings.
Recently, our globalized economy -- particularly when it comes to financial markets -- has led to major foreign banks such as UBS (NYSE:UBS), Credit Suisse (NYSE:CS), and Deutsche Bank (NYSE:DB) taking massive write-offs, thanks to their participation in the U.S. subprime meltdown. If I were in one of those countries right about now, I might be looking at the U.S. with a healthy dose of skepticism.
With polls like this, it's important to remember that there's typically a limited sample size (in this case, 606 respondents). So although they can reveal some interesting trends, they're not set-in-stone truth. However, for the sake of our economy, I hope that a trend toward protectionism doesn't make its way into the decisions made in the upcoming 2008 election.
