In May 2006, President Bush appointed Goldman Sachs CEO Henry "Hank" Paulson as US Treasury Secretary. In the interval, Paulson has had little success in getting China to allow its currency to float. The renminbi may be undervalued by as much as 40%, which is positive for US inflation. However, China is viewed by many Americans as a threat to US jobs. It is not a simple issue as an estimated 60% of Chinese exports are made by either foreign-owned firms or firms with a foreign-owned stake. White House photo by Shealah Craighead

The overseas earnings of large US companies may well be shielding the US economy from a recession at a time when the housing market is in a steep slump but voters of the traditionally pro-business Republican Party, by a nearly two-to-one margin, believe free trade is bad for the US economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.

A new Wall Street Journal-NBC News Poll shows a fraying of Republican Party orthodoxy on the economy. While 60% of respondents said they want the next president and Congress to continue cutting taxes, 32% said it's time for some tax increases on the wealthiest Americans to reduce the budget deficit and pay for health care.

Six in 10 Republicans in the poll agreed with a statement that free trade has been bad for the US and said they would agree with a Republican candidate who favoured tougher regulations to limit foreign imports. The Journal says that represents a challenge for Republican candidates who generally echo President Bush's calls for continued trade expansion, and reflects a substantial shift in sentiment from eight years ago.

In a March 2007 WSJ/NBC poll, before recent scandals involving tainted imports, 54% of Democratic voters said free-trade agreements have hurt the US, compared with 21% who said they have helped.

President Bill Clinton in the 1990's, promoted the North American Free Trade Agreement while in the current presidential campaign, Hillary Rodham Clinton opposes a US trade deal with South Korea.

The poll published in The Wall Street Journal today posed two statements to voters. The first was, "Foreign trade has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choices for consumers."

The second was, "Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products."

Asked which statement came closer to their own view, 59% of Republicans named the second statement, while 32% pointed to the first.

Former US Treasury Secretary Lawrence Summers and others have warned in recent times that the huge earnings of those towards the top of the economic pyramid, with CEOs making huge multiples of typical worker earnings and the income of average Americans static, is a recipe for promoting protectionism.