Why Trump won. And what he stands to lose from now on

[vc_column_textDrafted 22 January, updated 4 March 2025

You will find some of my remarks at the end of this article

David Autor, labour economist at MIT : “One of the most damaging aspects of Trumpism is isolationism”

The Massachusetts Institute of Technology professor explains, in an interview with Le Monde, how Chinese competition in the early 2000s destroyed industrial jobs in the US and fuelled the vote for Donald Trump.

Comments collected by Marie Charrel

An American labour market specialist, David Autor, a professor at the Massachusetts Institute of Technology (MIT), has focused on the ‘China shock’, i.e. the industrial decline caused, in the US and Europe, by the increase in Chinese exports that followed China’s accession to the World Trade Organisation in 2001. He now believes that Donald Trump’s planned measures will be costly for his country and the rest of the world.

How has the ‘China shock’ fuelled the growth of the vote for Donald Trump?

Populism is growing all over the world today for a number of complex reasons, but it is certain that in the United States, Chinese competition contributed to Trump’s success. In fact, it had a very strong negative impact on employment in some regions, particularly in the south, where industries requiring low-skilled labour were concentrated.

When these factories were moved to China, the laid-off workers found themselves with very little support, as the American social safety net is very weak. Many were unable to move to find work elsewhere – in this respect, the idea that the US labour market is characterised by high geographical mobility is partly a myth. Over the years, the living spaces of these low-educated white workers have changed: they have seen the arrival of people of Hispanic origin, foreign-born graduates, which has further fuelled their frustration, which Trump has been able to channel and use to his advantage.

Has American industry, which in recent months has benefited from the massive investment provided by the Inflation Reduction Act, recovered from this shock?

It is true that the Inflation Reduction Act has triggered investments in the manufacturing sector, but these will not bear immediate fruit and some will be misspent, which is normal. In this respect it would also be counterproductive for Trump to stop this programme.

But behind the good data of the US economy, which has real strengths in terms of innovation, the sector is not doing so well. It has lost a lot of capacity in the automotive sector, which is not very dynamic, and in aeronautics, with the failures of Boeing. Moreover, it still has no real ability to respond to China in these strategic areas.

How then can we explain the good health of employment and productivity?

The remarkable increase in productivity in recent months has not come from industry, but from services. For that ? Undoubtedly several factors have played a role, but this is still not entirely clear. But let us remember in particular that the US has handled the pandemic very badly: it has allowed unemployment and redundancies to explode. Paradoxically, this disaster may have encouraged a reallocation of labour to more productive companies.

What will be the consequences for the labour market if Donald Trump restricts immigration?

It would be a disaster, even more damaging than tariffs. One of the secrets of America’s success is that it has attracted incredibly talented people from all over the world, contributing to technological innovation and research.

Trump specifically targets low-skilled immigration. However, much of the incredible job growth observed under the Biden administration is related to immigration. The benefits are numerous, not least because it slows the ageing of our working population at a time when, like all developed countries, we are beginning a difficult and costly demographic transition.

Europe is now facing a second ‘ China shock ‘. What lessons can we learn from the American experience?

China is expected to produce 45% of the world’s manufactured goods by 2035, up from 6% in the 1990s. Chinese companies are formidable competitors that have benefited from huge state subsidies. This major wave, which is difficult to break, will result in a major deindustrialisation in Europe, as we see today in Germany, but also in many parts of the world, including Latin America.

Faced with competition on this scale, if we want to prevent these countries from being overwhelmed by Chinese products, the laws of the free market and ‘laisser-faire ‘ are not effective. Workers must be protected through a combination of protections against unfair trade practices and investment in domestic capacity.

Are Trump’s planned new protectionist measures an adequate response?

It is difficult to say, because what will Trump do while in office? He is as unpredictable as Xi Jinping. Many have long thought that China will sooner or later reform and open up, that we should just wait. I never thought about that. I am not a Trump voter, but his administration has at least had the merit of changing the perspective on Beijing, of recognising it as an economic and strategic rival. The risks are high.

What are your fears?

Trump inherits a healthy economy and, initially, his cocktail of tax cuts and deregulation will create temporary growth and euphoria that will mask many of the problems. But in the medium term the impact will be negative. The Republicans do not want to do anything that actually costs money and claim they are taking measures for free. Would raising tariffs cost consumers nothing? That is false, they would pay the price increase. Reduce taxes? This will eventually be expensive, because the state needs revenue to invest in our infrastructure, which will deteriorate considerably if we do not do this.

But one of the most damaging aspects of Trumpism is isolationism. That of wanting to build a wall, close our borders, turn our backs on NATO. Abandoning Ukraine will give China even more confidence to attack Taiwan. Republican policy will indeed come at a huge cost, both to the US and to the rest of the world. The Trump administration will undoubtedly manage the decline of the US instead of strengthening it.

Your work has shown that the technological revolution of the Internet and computers has penalised middle-class jobs. Will it be the same with artificial intelligence (AI)?

No, because the possibilities offered by AI are very different from those of traditional IT, which consisted of automating rules and procedures. This has partly replaced some office and production jobs, pushing people into services, catering, cleaning or security – all socially useful jobs, but poorly paid because they require little expertise.

Artificial intelligence enables tasks that require judgement, flexibility and reasoning. It is therefore much more likely to replace highly skilled experts. But it will also create opportunities for less-skilled people, who could then access expert jobs in medical care, software development or legal affairs. That would be really powerful.

Will this happen? We are in a period of change. One of the possible scenarios is to see the emergence of a world in which anyone could fill an expert job without specific skills, where the work would be poorly paid and precarious because employees would be easily replaceable. But artificial intelligence also offers incredible possibilities for accelerating scientific progress in all fields.

How should artificial intelligence be regulated to encourage these good uses?

Beyond regulation, it is primarily a matter of choice: it is not the technology that decides its uses, but us. China is now the country with the greatest surveillance and censorship capacity in the world, because it has chosen to invest heavily in using technology for this purpose. But it is possible to invest instead in artificial intelligence to provide health care to more people and at a lower cost, to make education more attractive and accessible, to improve energy production.

Will artificial intelligence bring different benefits to developing countries?

I believe so. Many Western technologies are not very useful in developing countries because they were not designed for them. Many of our genetically modified crops are suitable for Europe, but not for southern environments. Nuclear power plants can be a good way to produce energy, but in a region that does not have the infrastructure to support them, they can be extremely dangerous.

There are, however, exceptions. Thus, although not designed for developing countries, mobile telephony has improved welfare more widely than in northern countries, enabling long-distance communication, access to weather forecasts, information and mobile banking.

I think that artificial intelligence will also have this potential, giving them quick access to medical, technical, governmental and financial expertise. But it will also lead to greater competition in some areas. If, for example, everyone can now speak English thanks to simultaneous translation software, English-speaking countries such as the Philippines or India, which have developed call centres for the rest of the world, will compete with non-English-speaking countries.