Trade practices designed to discourage imports
No easy way back for U.S. manufacturing
President Donald Trump declared on October 1 that the new trade deal with Canada and Mexico signifies the return of the United States as a “manufacturing powerhouse.” U.S. manufacturing has indeed changed dramatically since 1992, when the three countries signed their original trade pact. But the complex and varied factors that have reshaped factory production in the U.S. cannot be summarily reversed.
Brexit and trade
Brexit negotiations between the European Union and the United Kingdom were supposed to be concluded at the EU summit on October 17. But the deadline passed with no breakthrough, and no plans for a new meeting. With the clock to a “hard Brexit” ticking down, this could be the salutary shock needed to pave the way for a compromise — or point to a future in which the UK’s diminished weight in international trade encourages a drift toward protectionism.
Modi looks inward on trade
The Indian government has taken a protectionist posture on trade, taking measures to boost domestic manufacturing, hike tariffs and stall trade negotiations. Yet exports have failed to increase, in part because of red tape and poor logistics. The administration’s present attitude could see India struggle with the current account deficit and increasingly get shut out from overseas markets, unless a growing corporate sector can lobby for change.
Asia-Pacific countries look for signs of hope in Trump trade policy
Over the past two years, protectionism has dominated U.S. trade policy decisions, unsettling American trade partners in the Asia-Pacific region. These countries are unlikely to simply buckle to U.S. demands, instead expanding trade relationships with other states. However, there are signs that the administration could soften its stance and return to more pro-free trade policies. If it does, that could lay the groundwork for a return to bigger economic engagement in the region.
Dark clouds gathering over the global economy
We are probably coming to the end of a global economic recovery. But with interest rates still hovering around zero, central banks will have no ammunition to fight a recession. Meanwhile, debt is high and more trade barriers are going up. The underlying causes of global economic imbalances, and not just the symptoms, must be addressed.
U.S. security policy toward Europe: The next phase
One of the most frequently asked questions about President Donald Trump’s foreign policy is what it plans to do about Europe. The answer to that is now clearer, though not necessarily the disaster for transatlantic relations that the G7 summit in Quebec appeared to be. What Washington has in mind is unsettling enough – regional stability and security, yes, but through bilateral engagement, and with much more combative economic policies.
Opinion: Ready for the next recession?
Economists enjoy delivering bad news. The current favorite being shared by academics and financial experts is that the world is headed for a recession, in 2020 or 2021 at the latest. But we regard this as unlikely, unless there is a major political accident – such as a trade war or turmoil in China. While a slowdown is always possible, especially in Western Europe, that does not make a recession.
Where the United States and global trade are heading
The U.S. is the world’s largest open economy and pillar of the global trading system. Yet its economic challenges today – government debt, wealth inequality, and labor force participation – cannot be reliably addressed through more open trade. One should therefore expect more U.S. steps to change the terms of trade and pressure leading exporters over the next two years.