The other approach is that adopted by the US President Donald Trump’s administration. Noting that past efforts to reverse the growth of non-tariff barriers have not worked and will not work, this strategy is more open to the use of tariff penalties to influence behavior modification, and the threat of escalation in response to any and all retaliation by trading partners.
First widely dismissed as an unfortunate policy pivot, more people now are beginning to wonder whether the new US approach – provided it’s not used repeatedly – could in fact serve as a beneficial disruption that helps reset international trade relationships and place them on a firmer footing. It’s a view that is underpinned by evidence (the shift from retaliation to resolution by such countries as Canada, South Korea, and Mexico) and the prospect that, due to its limited options, China will have no choice but to do the same by addressing some of its non-tariff barriers.
The task for the international community is to take advantage of the emerging window to move more comprehensively on implementing measures to counter slowing growth, reduce the risk of financial instability, and ensure more inclusive prosperity. Such measures are less a problem of engineering (in the sense that most economists agree on what’s needed) than of politics (the need for decisive leadership and sustainability).
www.project-syndicate.org
First widely dismissed as an unfortunate policy pivot, more people now are beginning to wonder whether the new US approach – provided it’s not used repeatedly – could in fact serve as a beneficial disruption that helps reset international trade relationships and place them on a firmer footing. It’s a view that is underpinned by evidence (the shift from retaliation to resolution by such countries as Canada, South Korea, and Mexico) and the prospect that, due to its limited options, China will have no choice but to do the same by addressing some of its non-tariff barriers.
The task for the international community is to take advantage of the emerging window to move more comprehensively on implementing measures to counter slowing growth, reduce the risk of financial instability, and ensure more inclusive prosperity. Such measures are less a problem of engineering (in the sense that most economists agree on what’s needed) than of politics (the need for decisive leadership and sustainability).
The Dialectic of Global Trade Policy | by Mohamed A. El-Erian - Project Syndicate
Mohamed A. El-Erian suggests that the US turn toward protectionism may ultimately turn out to be a beneficial disruption.