GIS Dossier: Global trade and protectionism
According to the economic law of comparative advantage, the whole world has benefited from the enormous expansion of international trade since 1980. But over the past decade, few countries have acted like they believe it. GIS experts look at the roots and likely future course of protectionism’s global resurgence.
Are we heading toward trade wars?
Sluggish international trade in recent years has given reasons to worry about globalization. The value of trade involving the G20 group of countries leveled off in 2010 and has been in decline since mid-2014. Many blame Donald Trump and the new vogue for protectionism, but that is an oversimplification.
U.S. trade options in Asia
President Donald Trump’s pledge to crack down on countries that have large trade surpluses with the U.S. has created a lot deal of uncertainty in Asia. Will the new administration enforce current laws and seek bilateral deals, or will it take a more punitive, protectionist stance? Washington’s choice – and how its partners respond – may determine whether the U.S. keeps its leading role in Asia or gets marginalized.
Opinion: Trumponomics is worth a second look
President Donald Trump’s economic program is perceived by many as a recipe for disaster. But its most questionable, protectionist elements – such as the border adjustment tax – are unlikely to be implemented or could bring completely unexpected benefits. And the new administration’s plans for infrastructure and deregulation should bring positive effects.
Asian powers ponder options as America turns inward
With internationalism on the retreat in the United States and Europe, Asia’s two biggest powers find themselves on the spot. Both China and India have spoken in defense of globalization and a multilateral, rules-based order. But neither appears ready to fill the vacuum left by receding U.S. power.
Return of shale? Scenarios for the Trump administration
The first shipments of what promises to be a flood of shale gas from the United States have reached Asia. These exports could dramatically increase U.S. political leverage in the region. Most importantly, they have the potential to forge new bonds with China in a time of stress and help check Russian expansion.
President Trump’s real bet is on tax cuts
President Donald Trump has threatened to erect trade barriers to create jobs and boost wages in the United States. These goals won’t be reached through protectionist measures, which more likely will be used as a geopolitical bargaining chip. Instead, Mr. Trump’s economic policy will hinge on the success of his plan to cut corporate tax rates and weaken the dollar.
The U.S. and China’s ‘free trade’ agendas
The United States and China are not true champions of free trade. Beijing pushes exports but effectively curbs imports through a maze of administrative obstacles. Washington traditionally concentrates on job protection and creation; its trade policies reflect these priorities.
Fed seeks cover in ‘natural’ interest rate
Last summer, commentators began predicting that U.S. monetary policy would no longer aim to avoid deflation and boost growth, but to keep market interest rates close to what economists call the 'natural' rate. The reasoning behind this argument – publicly voiced by Fed Vice Chairman Stanley Fischer, among others – is puzzling. That may be deliberate, as the Fed has plenty of reasons to want a free hand in coming months.
Progress and disillusionment in Mexico
The advent of Donald Trump has not come at a good time for Mexico. After a fast start, the reform-minded government of President Enrique Pena Nieto has bogged down in corruption scandals and a stagnant economy. But tensions with the U.S. may also create opportunities for Mr. Nieto, if he is skillful enough to use them.