Winners and Losers:
 The Psychology of Attitudes Toward 
Foreign Trade

Post developed by Katherine Pearson and Diana Mutz

Foreign trade is a complex issue, but the public still has strong opinions about the issue. Diana Mutz demonstrated that social psychology can help to understand attitudes about trade when she delivered the 2019 Miller Converse lecture. A recording of her talk “Winners and Losers: The Psychology of Attitudes Toward Foreign Trade” is available below.

Most people rely on small-scale social experiences to understand large-scale interactions such as international trade. From this understanding, people tend to embrace beliefs about trade that are not necessarily accurate. For example, folk beliefs suggest that impersonal transactions are more dangerous than personal ones, that trade is zero-sum, and that trade “deficits” mean that a country is losing more jobs as a result of imports than it gains due to exports. These beliefs are inaccurate, yet understandable, generalizations from the world of face-to-face social exchange.

Contrary to popular wisdom, trade preferences do not reflect people’s economic self-interest. Mutz demonstrates that, surprisingly, these attitudes are not influenced by a person’s occupation, industry of employment, community job loss, geographic location, or individual job loss. Instead, perceptions of what is in the collective economic interest determine attitudes toward trade. Coverage of trade in the media has a large influence on these perceptions. Media coverage of foreign trade was mostly negative until 2016. As media coverage of trade has become more balanced since 2016, support for trade has also increased.

Politicians from all parties have been unwilling to champion trade when running for office because foreign trade is seen as a political liability in the United States. As the world economy changes, Mutz asserts that leaders will need to advocate for trade and for safeguards against its negative effects. She cautions that it’s unhelpful to leave the public out of that conversation altogether as has been common in the past.

For an additional perspective, Mutz compares attitudes about trade in the United States and Canada. She finds that attitudes about trade in the two countries are different due to differing attitudes toward competition. Americans value competition more, and believe in the fairness of unequal outcomes. In the U.S., nationalism reduces support for foreign trade, but in Canada the opposite is true. Canadians who hold the strongest beliefs about national superiority want to promote more trade and immigration.

Differing perspectives on trade in these countries can be explained by variation in two different types of ingroup favoritism. First, Americans in Mutz’s studies systematically preferred trade agreements in which their fellow Americans benefited more than trading partners. In fact, there was no level of job benefits to foreign countries that would justify the loss of even a single American job. This was not the case among Canadians. In addition, Americans demonstrated their competitive attitudes toward trade by demonstrating greater support for trade agreements that not only benefit their country but also disadvantage the trading partner. Canadians, in contrast, preferred the kind of “win-win” trade agreement that economists suggest benefits all countries involved.

Attitudes about race drive attitudes about trade and Mutz finds that the reverse may also be true. In a study that asked respondents to select which students should be admitted to college, participants who had just watched an ad against foreign trade were less supportive of admitting Asian-American students, as well as students from Asia.

Mutz concludes that, while many of these results are distressing, attitudes remain malleable. Efforts to change opinions toward trade that emphasize similarity and shared values are more effective than efforts emphasizing pocketbook gains. Since 2016, her data shows that there has been an increase in support for foreign trade and a realization that it comes with benefits as well as negative consequences.

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 The Psychology of Attitudes Toward 
Foreign Trade

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