Trump's Trade War: The Unintended Consequences

The transcript discusses the effects of NAFTA on the US and Mexican economies, highlighting its success in reducing undocumented migration. It explores the potential negative impacts of ending NAFTA, such as increased migration and illicit activities. The discussion also covers the effects of trade on job displacement, emphasizing that while some jobs are lost, trade generally leads to higher productivity and income jobs. The potential consequences of trade wars, particularly under Trump's proposals, are analyzed, showing significant job losses in the Midwest. Finally, the broader economic impacts of trade shocks on non-traded goods sectors are examined, illustrating how these sectors are affected by changes in the manufacturing sector.

What is one potential consequence of abrogating NAFTA according to the transcript?

• Increased documented migration to the US

• Economic growth in Mexico

• More undocumented migration to the US

• Decrease in illicit activities in the US

How does the opening of trade with Mexico affect employment in the US?

• It has no impact on employment

• It pushes employment towards higher productivity and income jobs

• It only benefits the Mexican economy

• It only creates low-income jobs

What is a potential impact of a trade war with China and Mexico on Indiana?

• Increase in manufacturing jobs

• No change in employment

• Loss of approximately 112,000 jobs

• Increase in employment by 4%

Which sector is most intensely impacted by a trade war according to the transcript?

• Retail distribution

• Manufacturing

• Temporary employment agencies

• Fast food restaurants

What is a surprising finding about the impact of a trade war on non-traded goods sectors?

• They only affect high-wage workers

• They experience the largest impacts in absolute terms

• They are unaffected by trade wars

• They benefit from trade wars