Trade Wars : What Do They Mean? Why Are They Happening Now? What Are the Costs?
How should economists interpret current trade wars and the recent U.S. trade actions that have initiated them? This paper offers an interpretation of current U.S. trade actions that is at once more charitable and less forgiving than that typically...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/147771555968441512/Trade-Wars-What-Do-They-Mean-Why-Are-They-Happening-Now-What-Are-the-Costs http://hdl.handle.net/10986/31584 |
| Summary: | How should economists interpret current
trade wars and the recent U.S. trade actions that have
initiated them? This paper offers an interpretation of
current U.S. trade actions that is at once more charitable
and less forgiving than that typically offered by economic
commentators. More charitable, because under this
interpretation it is possible to see a logic to these
actions: the United States is initiating a change from
"rules-based" to "power-based" tariff
bargaining and is selecting countries with which it runs
bilateral trade deficits as the most suitable targets of its
bargaining tariffs. Less forgiving, because the main costs
of these trade tactics cannot be avoided even if they happen
to "work" and deliver lower tariffs. Rather, the
paper shows that the main costs will arise from the use of
the tactics themselves, and from the damage done by those
tactics to the rules-based multilateral trading system and
the longer-term interests of the United States and the rest
of the world. |
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