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 Trump has built his campaign on pledges to scrap international
trade deals and do more to protect American workers from foreign
competition, tapping the same groundswell of discontent that
propelled Clinton's rival Bernie Sanders to victory in the
Midwestern state on Tuesday.
Clinton remains heavily favored to win the Democratic nomination.
But the setback in Michigan could signal further troubles in
upcoming primaries in other Rust Belt states such as Ohio, forcing
her further to the left on economic issues and possibly influencing
her choice for an eventual running mate, strategists said.
The backlash against 20 years of trade liberalization has stalled
the Trans Pacific Partnership (TPP), a sweeping Pacific trade deal
backed by President Barack Obama and threatens to stymie the trade
agenda for years to come.
"It's politically radioactive to support free trade right now," said
Greg Valliere, a Washington analyst for Horizon Investments, a
financial firm.
 Clinton's troubles with her party's left wing -- and with white,
working class voters more generally -- may steer her toward a trade
skeptic such as Senator Sherrod Brown of Ohio as a vice presidential
running mate, said Democratic strategist Steve Jarding. Political
pundits had expected Clinton to pick someone to increase her appeal
to Hispanic or other minority voters, such as U.S. Housing and Urban
Development Julian Castro.
Sanders, 74, is unlikely to end up as Clinton’s running mate, partly
due to his age, Democrats said.
Both Sanders, a democratic socialist, and billionaire Trump have
harnessed anti-trade sentiment in their insurgent White House bids,
criticizing deals like NAFTA as job killers that have depressed the
living standards of working Americans.
Exit polls from Michigan, a hub of the U.S. auto industry, show
widespread voter skepticism on trade that may have helped Sanders
and Trump win their respective party primaries.
"She made a fundamental mistake early on in this campaign to try to
stay in the center," Democratic strategist Steve Jarding said of
Clinton. "This cycle, there is no center."
NUANCED TRADE STANCE
Sanders campaigned heavily against foreign trade in a state that has
been hammered by overseas competition since the 1980s. Some 58
percent of his supporters in Michigan exit polls said that trade
takes away U.S. jobs, while a slight majority - 53 percent - of
Clinton backers said trade creates U.S. jobs.
The Economic Policy Institute, a left-leaning think tank, estimates
that Michigan would lose 5 percent of its jobs if TPP were to take
effect, the highest proportion of any state.
Gary Hunley, a substitute teacher in Dearborn, Michigan, said he
believed Clinton was partially to blame for stagnant wages because
NAFTA was enacted under her husband Bill Clinton's presidency in the
1990s.
"She was not a passive first lady," Hunley said.
Clinton's stance on trade is more nuanced than Trump's and Sanders'.
After NAFTA was enacted, she voted against a free-trade deal with
Central America while serving as a U.S. senator in the following
decade.
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As Obama's secretary of state, Clinton helped negotiate the TPP with
Japan, Vietnam and other Pacific Rim countries.
As a presidential candidate, Clinton has said after reading the
final language of the deal she would vote against it because it does
not adequately protect U.S. workers.
Clinton campaign manager Robby Mook told reporters Wednesday there
were no plans to adjust her stance and that he would "put Secretary
Clinton up against any candidate in this race on trade," including
Trump.
Despite backing by the Obama administration, Republican lawmakers
and many business groups, Republican leaders in Congress have shown
no sign that they will bring TPP up for a vote this year.
The Obama administration says the deal has high labor and
environmental standards that were not part of NAFTA. "I’m not sure
that has fully been absorbed in the public mindset," U.S. National
Security Adviser Susan Rice told Reuters.
The deal may fare no better under the next president. Sanders and
Trump oppose TPP, and Senator Ted Cruz, who is in second place in
the Republican contest, has said he would not vote for it this year.
"They've listened to the public and politicians have caught up with
the public on this," Brown, the Ohio Democratic senator, told
Reuters.
The evidence that the TPP would help the U.S. economy much is less
than conclusive.
The Peter G. Peterson Institute, a pro-trade think tank, estimates
that it would boost economic growth by just 0.5 percent after 15
years.
The deal would not boost employment overall, but would result in a
"churn" of 53,700 jobs lost and created each year, and it would
boost incomes by 0.5 percent, the institute found.
Another estimate by the Global Development and Environment Institute
at Tufts University found the trade deal would slow growth by 0.54
percent after 10 years and cost 448,000 jobs in the United States.
(Additional reporting by David Lawder, Amanda Becker, Valerie
Volcovici, Richard Cowan, Roberta Rampton and John Whitesides;
editing by Stuart Grudgings)
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