How a Stronger Dollar Could Play Havoc With Politics in 2016

Americans usually punish the incumbent party when they elect a president against a backdrop of rising imports, according to a new study. That could foreshadow bad news for whoever emerges as the Democratic nominee from the presidential contest that got under way in Iowa this week.

Low-wage manufacturing jobs are threatened by import competition, and the fear of losing them tends to drive voters away from the party in power, argues a working paper published by the Cambridge, Massachusetts-based National Bureau of Economic Research. That scenario is in play this year as the strong dollar widens the U.S. trade deficit -- although, like everything about the 2016 election, the story may be more complicated this time around.