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Tag Archives: Trade Policy

The US China Phase 1 Deal Interpreted: Break Thing, Claim to Fix Thing, Repeat

Through 2018M03, US exports to China were growing smartly. The Section 232 and Section 301 actions were announced. The “deal” essentially restores real exports to China to the pre-shock trend for 2020, above for 2021 (if you believe!). If the commitments to the deal’s export provisions are upheld, then there is a quantitatively important impact, at least insofard as the US-China bilateral balance is concerned. However, what if nothing had happened in the US-China trade war. Well, me might...

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EconoFact: “What is the Toll of Trade Wars on U.S. Agriculture?”

By Menzie Chinn and Bill Plumley, at EconoFact, posted a few minutes ago: U.S. agriculture has been caught in the tit-for-tat of the trade wars. Retaliation by China, Canada, Mexico, Turkey and members of the European Union to tariffs imposed by the Trump administration have taken a bite out of U.S. agricultural incomes. Tariffs on imports of steel and aluminum in the United States have also raised costs for machines, equipment and structures used by the agriculture sector. Agriculture...

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Navarro vs. Navarro

From WSJ today, an op-ed by Peter Navarro: The national-security externalities associated with Trump trade policy may be even more  consequential. A case in point is the tariffs being used as leverage to defend America’s technological crown jewels from being forcibly transferred to Chinese companies—from artificial intelligence, robotics and autonomous vehicles to quantum computing and blockchain. These industries comprise the core of the next generation of weapons systems needed to repel...

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Dispatches from the Trade Wars

Net impact on employment from Trump’s trade war and associated retaliation: Source: Flaaen and Pierce, 2019. From Flaaen and Pierce: Since the beginning of 2018, the United States has undertaken unprecedented tariff increases, with one goal of these actions being to boost the manufacturing sector. In this paper, we estimate the effect of the tariffs—including retaliatory tariffs by U.S. trading partners—on manufacturing employment, output, and producer prices. A key feature of our analysis...

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Pictures from the Steel Trade War

Raw steel production is down, as is primary metal employment. Figure 1: Primary metal production workers (NAICS 331), 000’s s.a. (blue, left scale), and raw steel production index (NAICS 3311, 2pt.), 2012=100 (brown, right scale), both on log scale. Light orange is Trump administration; orange is since implementation of Section 232. Source: BLS, Federal Reserve Board, via FRED.  In 2015-17, it could be argued that the strong dollar drove the decline in employment in those years. Figure 2:...

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An Event Study: Trade Truce-Part 1, or Not?

See if you can find when Trump makes his statement about trade negotiations with China. Winning! Here is the Dow Jones, 5 minute increments. Clearly, Mr. Trump’s statement had an afterhours impact. Source: barchart.com accessed 12/3/2019 2:15pm Central. To see how the news was incorporated into expectations during non-trading hours, see the futures for the Dow Jones. Source: barchart.com accessed 12/3/2019 1pm Central.

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Guest Contribution: “Let’s Go Back to Good Old Tariff-Cutting”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A  appeared in Project Syndicate. The “bicycle theory” used to be a metaphor for international trade policy.  Just as standing still on a bicycle is not an option — one has to keep moving forward or else the bike will fall over – so it was said that international trade negotiators must...

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The Trumpian World as Natural Experiment

The Trump economic policy regime (if it can be called that) has provided several “natural experiments”. Do corporate tax rate reductions “pay for themselves”? Does expansionary fiscal policy at full employment lead to large increases in output? Does increasing trade protection necessarily lead to an increase in the trade balance? Does a bellicose and confused trade negotiating stance accelerate fixed investment? I think the answers are No, No, No, and No. On this last point, see Altig et al....

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