Daniel Gros, 09 September 2019

Traditional analysis of tariffs in a partial equilibrium setting can tell us much about the welfare consequences of the US-China trade war. The column argues that, as tariffs ratchet up, welfare costs for both sides increase disproportionately. The cost of trade diversion in the US to less-efficient suppliers likely overwhelms any terms-of-trade gain the US might enjoy. In all cases, exporters in the rest of the world benefit.

David Jacks, Dennis Novy, 23 July 2019

Against the backdrop of new tariffs imposed by the Trump administration and retaliation from targeted countries, notably China, the trade wars of the 1930s have received renewed attention. This column argues that they mainly served to intensify a pre-existing trend towards the formation of trade blocs. The trade wars of the present day may therefore serve a similar purpose as those in the 1930s, that is, the intensification of China- and US-centric trade blocs.

Chad Bown, 22 July 2019

Meredith A. Crowley, Ralph Ossa, Heiwai Tang, 20 June 2019

A new book from the CEPR argues that the current trade war is a long-term danger to all economies, not just those of the US and China. Editor Meredith Crowley of the University of Cambridge and two of the authors tell Tim Phillips why prospects for the world economy are 'grim'.

Meredith A. Crowley, 30 May 2019

As a trade war of unprecedented scope and magnitude engulfs the world’s two largest economies, this column introduces a new Vox eBook that seeks to shed light on the origins of the conflict, the current impacts on economic activity around the world, and the likely consequences for the future of globalisation. It concludes that the prospects for the future of the multilateral trading system look grim.  

Chad Bown, 10 May 2019

Who will be the biggest loser in this trade war? Chad Bown tells Tim Phillips why it could be the WTO's dispute resolution system, and why we should worry if this happens.

Jeffrey Frankel, 09 May 2019

Stephen Moore, President Trump’s pick for the Federal Reserve Board, has been pro-cyclical in his recommendations for monetary policy, opposing stimulus when the economy needed it and favouring stimulus when the economy did not. This column argues that Moore’s switch to urging monetary stimulus when Trump took office fits into a wider pattern among of pro-cyclical positions among leading Republicans, not just in monetary policy, but also fiscal and regulatory policy.

Pablo Fajgelbaum, Pinelopi Goldberg, Patrick Kennedy, Amit Khandelwal, 12 April 2019

The 2018 tariff hikes reversed a decades-long push by the US for lower global trade barriers around the world. This column examines the impact of the resulting trade war on the US economy. It estimates a $68.8 billion annual loss to US consumers and firms from higher import prices, with an aggregate annual loss of $7.8 billion when producer gains and tariff revenues are factored in. It also argues that US tariffs protected politically competitive counties, whereas retaliations by other nations targeted strongly Republican counties.

Jeffrey Frankel, 29 March 2019

The supposed deadline for a conclusion to China–US trade negotiations has been postponed until late April. This column argues that the structural reform aspect of the negotiations is reminiscent of US negotiations with Japan three decades ago, and that the Structural Impediments Initiative between the two countries could, in theory, serve as a useful model for the current US–China negotiations. The question is whether Presidents Trump and Xi have as firm a grasp on economic principles as their predecessors. 

Yasuyuki Todo, 27 February 2019

Raphael Auer, Barthélémy Bonadio, Andrei Levchenko, 07 February 2019

The tide has turned in international trade, with watershed political moments across the world showing the growing popularity of protectionist measures. This column analyses the relationship between the distributional effects of trade and voting patterns by modelling a scenario in which NAFTA is dismantled. It finds that the areas that voted most overwhelmingly for the Trump administration are the same as those that would experience the greatest wage decreases if NAFTA were to be revoked, due to the strong correlation in areas that face import competition from and export exposure to NAFTA partners.

Treb Allen, Caue Dobbin, Melanie Morten, 14 January 2019

A vigorous debate exists about the economic benefits of building a border wall between the US and Mexico. Yet, empirical evidence to guide the debate has lagged behind. This column studies the economic impact of the Secure Fence Act of 2006, which built 550 new miles of fence on the US–Mexico border. At a construction cost of $7 per person, the fence led to a small reduction in migration but had negligible effects on the economy, with high-skilled US workers losing $4.60 per year in income, and low-skilled US workers gaining just $0.36 per year. 

Jeffrey Frankel, 08 January 2019

Simon Evenett, Johannes Fritz, 14 December 2018

Presidents Trump and Xi effectively declared a truce in their trade war at the recent G20 Summit in Buenos Aires, giving their trade negotiators three months to settle their differences. This column argues that focusing on the bilateral trade war overlooks similarities in the trade distortions facing Chinese and American exporters worldwide in the form of export incentives, subsidies to domestic firms, and import tariff increases. It concludes that these two trading giants have more in common than they may realise.

Steven Brakman, Harry Garretsen, Tristan Kohl, 01 December 2018

Axel Dreher, Valentin Lang, B. Peter Rosendorff, James Raymond Vreeland, 24 November 2018

Countries that vote with the US when serving on the UN Security Council also receive more financial assistance. This column uses voting records in the Council to show that when these countries were US allies, they received more in US aid, but when the countries were not natural allies, they received more financial assistance from US-dominated international institutions instead.

Chad Bown, 30 October 2018

President Trump’s protectionism has a distinctive focus on disrupting US access to global supply chains. This column reveals that the major economies had in fact begun to impose additional trade protection on intermediate inputs even prior to 2016. New barriers targeting cross-border supply chains simply arose through policies aside from headline tariffs. Some of this new protection has also already spread beyond China’s trade and begun to cover exports from other countries. These results, combined with more recent policy actions, widen the possibility of a negative protectionist impact on the global sourcing of parts and components.

Stefano Ramelli, Alexander Wagner, Richard Zeckhauser, Alexandre Ziegler, 29 October 2018

President Trump’s election and the nomination of Scott Pruitt to lead the Environmental Protection Agency changed expectations of US climate change policy. This column uses movements in US stock prices to show that firms with high carbon intensity benefited, as expected, but so did firms with ‘responsible’ strategies on climate change. A significant group of investors raise the value of firms taking a long-term perspective. 

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