Trade practices designed to discourage imports
2018 Global Outlook: The Trump presidency, Year Two
After a year in the White House, Donald Trump is suffering as much from his own erratic personality as from the burden of office. Foreign policy in the traditional, institutional sense has ceased to exist, and the way the president and Congress operate suggests there will be little room for maneouver once domestic troubles start to mount. Miscalculation and overreaction become increasingly likely as the global arena grows more precarious.
Limits on posting workers create Europe’s high-cost cartels
European Union labor ministers have just agreed to a proposal that could see more protectionist measures implemented across the bloc. The new rules would limit employers’ flexibility how much they pay “posted” workers – employees from a different EU member state. Until now, posting workers added needed competition to the labor market. Eliminating that option just protects high-cost cartels created by EU states with excessive cost structures.
India and Germany draw closer
India and Germany may seem like an odd couple. But a recent flurry of diplomatic consultations suggest that the two countries may be beginning to form a strategic relationship. What animates them is a belief that second-tier powers need to work more closely together to shore up an international order threatened by an assertive China and a whimsical United States.
Protectionism undermines European principles
Emmanuel Macron came to office promising to liberalize the French economy and reduce the role of the state. But his government is already turning protectionist, threatening to “temporarily nationalize” a shipyard. The move undermines European and liberal principles.
Outlook improves for Latin American economies
The economic news coming out of Latin America is finally somewhat positive. Stagnation seems to be turning into growth. However, most of this is due to a recovery in commodity prices. Underlying structural problems, especially inequality, persist. Sustainable economic growth in the coming years will require smart domestic policy choices and lowering barriers to intra-regional trade.
The bubble that does not burst
Many commentators have warned of the imminent bursting of the stock bubble. But while loose monetary policy and economic stability have inflated equity prices, it will take a shock to initiate a crash – and such a shock does not look likely. The prime candidates are a sudden burst of inflation, a Chinese crash or a European crisis triggered by Italy’s public finances. Absent these, one might expect occasional price dips, but no collapse.
Opinion: Confusing statements on money and trade
Janet Yellen is not worried about another global financial crisis. Mario Draghi and even Warren Buffet bemoan “inequality.” But no one seems to be taking seriously the problems artificially cheap money is causing to the global economy. With such a fragile global financial situation, free trade could be a big help – but protectionism is on the rise. Could the upcoming G20 meeting bring substantive progress on that count?
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.