Summary: Soumaya Keynes (The Economist) and Chad P. Bown (Peterson Institute for International Economics) cohost a podcast about the economics of international trade and policy. From trade wars to trade deals, this podcast covers trade developments with insights and economic analysis from two of the world's top trade geeks.
Keynes and Bown discuss the Trump administration’s announcement to impose new tariffs on $300 billion of Chinese imports split across September 1 and December 15, 2019. Each tariff list targets a different set of consumer goods for the first time, and yet their rollout also avoids import surges associated with peak American shopping seasons. They also describe new evidence of heightening concerns over the condition of the US and global economy. Read more… Chad P. Bown. Trump’s Fall 2019 China Tariff Plan: Five Things You Need to Know. Peterson Institute for International Economics Trade and Investment Policy Watch. August 14, 2019.Soumaya Keynes. The trade war is leading some firms to crimp investment. The Economist, August 15, 2019.Chad P. Bown and Douglas A. Irwin. Trump’s Assault on the Global Trading System. And Why Decoupling From China Will Change Everything. Foreign Affairs, September/October 2019.
Keynes and Bown discuss the Trump administration’s decision to name China a currency manipulator. They are joined by former IMF Chief Economist Maury Obstfeld (PIIE, Berkeley), Joseph Gagnon (PIIE), and Alice Fulwood (The Economist), who help explain what affects the value of the US dollar, the history of Chinese currency manipulation, the challenge of identifying a country as a currency manipulator, and the implications of the Trump administration’s actions today. Read more… Soumaya Keynes. The Trump administration labels China a currency manipulator. The complaint is more than a bit muddled. The Economist, August 6, 2019.Alan Beattie. Donald Trump sets a toothless dog loose on China. Making the ‘currency manipulator’ designation now is logically incomprehensible. Financial Times. August 6, 2019.C. Fred Bergsten and Joseph E. Gagnon. Currency Conflict and Trade Policy: A New Strategy for the United States. Peterson Institute for International Economics, 2017.
Adam Posen (Peterson Institute for International Economics) joins Keynes and Bown to discuss the US Federal Reserve’s decision to cut interest rates for the first time in 10 years. They describe the uncertainty facing central bankers, the impact of the global economy on their decision-making, and whether there is a relationship between their actions and President Trump’s tariffs. Read more… Adam Posen. 2019. Trump’s New Tariff Actions: A Wakeup Call to Global Markets. PIIE Trade and Investment Policy Watch. Olivier Blanchard and Christopher G. Collins. 2019. Markets Don’t Believe Trump’s Trade War Is Zero-Sum. PIIE Trade and Investment Policy Watch.Soumaya Keynes. 2019. The Fed cuts rates for the first time in over a decade. The Economist, August 1. Soumaya Keynes. 2019. More American tariffs on Chinese imports are coming. The Economist, August 2.
Former United States Trade Representative Michael Froman joins Keynes and Bown to discuss the Obama administration’s approach toward China and the World Trade Organization. On China, they describe the challenge of relying on allies and US companies when using WTO dispute settlement, the utility of the US-China bilateral investment treaty negotiations, and the links between trade and national security. On the WTO, they discuss the deals that were agreed, the decision to end the Doha Round of negotiations, and the Obama administration’s frustrations with the Appellate Body. Read more… Michael Froman. 2019. Trump needs a comprehensive trade deal with China. Luckily, he has this to build on. The Washington Post.
Keynes and Bown are joined by Dukgeun Ahn (Seoul National University) to discuss Japan’s threat to limit South Korean access to inputs needed to make display panels and semiconductors for smartphones. The current dispute traces back to failures to resolve private reparations claims over World War II atrocities. They explain new economic threats to regional supply chains, Japan’s national security justification for its decision, the role of the WTO and a legal decision over the Fukushima nuclear accident, and even implications for the CPTPP.
Ben Hyman (Federal Reserve Bank of New York) joins to discuss the problem of workers hurt by increased competition arising through trade. They explain the US Trade Adjustment Assistance (TAA) program and new evidence on whether it helps workers stay in the labor market, retrain, and keep earning wages by remaining attached to jobs. Read More… Ben Hyman. 2018. “Can Displaced Labor be Retrained? Evidence from Quasi-Random Assignment to Trade Adjustment Assistance.” Working paper, November.Peter Z. Schochet, Ronald D’Amico, Jillian Berk, Sarah Dolfin, and Nathan Wozny, N. 2012. “Estimated Impacts for Participants in the Trade Adjustment Assistance TAA Program Under the 2002 Amendments.” Mathematica Policy Research.
Former Indonesian Trade Minister Mari Pangestu joins Keynes and Bown in a wide-ranging conversation about trade policy and negotiations in Asia. They chat about Indonesia’s episodes of trade liberalization, corruption, and the benefits of losing a WTO dispute. They discuss her experience negotiating ASEAN (Association of Southeast Asian Nations) free trade agreements with both India and China, as well as the birth of the RCEP (Regional Comprehensive Economic Partnership) idea. They also explain how Indonesia is caught between China and the United States in the ongoing trade war, and the negotiations Indonesia now faces with the Trump administration under the Generalized System of Preferences.
Gordon Hanson (University of California San Diego) joins Keynes and Bown to explain the migration and humanitarian crisis at the heart of President Trump’s threat to impose new tariffs on imports from Mexico. They discuss the history of undocumented migration arising since the 1960s, as well as how it has been impacted by changes in US and Mexican economic conditions and immigration policies. They also describe how the crisis has been affected by rising violence in Guatemala, El Salvador, Honduras and Mexico, as well as the unintended consequences of US and Mexican migration and asylum policies.
Keynes and Bown describe President Trump’s decision to declare an emergency on the US southern border. On May 30, Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA) and stated he would impose new tariffs on all US imports from Mexico starting June 10 unless, in his view, the “illegal migration crisis is alleviated through effective actions taken by Mexico.” They discuss the potential legality of such an action, as well as the likely economic implications for the United States, Mexico, and the trading system. Read more… Soumaya Keynes. 2019. Donald Trump vows to use tariffs to punish Mexico for migrants. The Economist, 31 May.Gary Hufbauer. 2016. Could a President Trump Shackle Imports? In Assessing Trade Agendas in the US Presidential Campaign, PIIE Briefing 16-6, September. White House. 2019. Statement from the President Regarding Emergency Measures to Address the Border Crisis. 30 May.
Keynes and Bown explain Trump’s latest trade actions in his national security cases on steel, aluminum and automobiles. They speak with Kristin Dziczek (Center for Automotive Research) about perceived threats to R&D of “American-owned” carmakers, as well as the political and economic implications of Trump negotiating voluntary export restraints on autos from the EU and Japan. They also describe the managed trade implications of the agreement to remove US tariffs on steel and aluminum from Canada and Mexico, as well as the possible resumption of future conflict. Read More… Soumaya Keynes. 2019. American importers of metals from Canada and Mexico gain relief from tariffs. But the overall direction is still towards protectionism. The Economist, 23 May.
Lucie Gadenne (University of Warwick, IFS) joins Keynes and Bown to explain when and why some countries use import tariffs as an important source of total tax revenue collections. They discuss her research on the fiscal cost of trade liberalization, what has happened recently when poor countries cut tariffs, and how and why things were different historically when today’s rich countries opened up to trade. Read more… Juliet Cage and Lucie Gadenne. 2018. Tax Revenues and the Fiscal Cost of Trade Liberalization, 1792-2006, Explorations in Economic History.
Keynes and Bown update the sudden change in US-China trade negotiations and President Trump’s tariff escalation. They speak with Lingling Wei in Beijing (Wall Street Journal) about misunderstandings and why the two sides remain so far apart. They also discuss the expected economic impact of Trump’s new tariffs, as well as his proposal to buy US farm products and distribute them to poor countries. Read more… Soumaya Keynes. 2019. So far, Donald Trump’s trade war has not derailed the global economy. An escalation would inflict much greater damage. The Economist, 9 May. Chad P. Bown and Eva Y. Zhang. 2019. Trump’s 2019 Protection Could Push China Back to Smoot-Hawley Tariff Levels. PIIE Trade and Investment Policy Watch, 14 May.
Duncan Robinson (The Economist) joins Soumaya Keynes and Chad Bown to provide an update on the Brexit process of the United Kingdom leaving the European Union. They discuss ongoing cleavages in the major British political parties, and implications of the 2019 elections to the European Parliament taking place in the United Kingdom as well as across Europe.
Gene Grossman (Princeton University) joins Soumaya Keynes and Chad Bown to chat about decades of research on what determines tariffs in the real world. They discuss the role that voters, politicians, lobbyists, and campaign contributions play in setting out the supply of and demand for trade protection. They also describe what political economists may have gotten wrong, as well as the role that identity politics may have played in shaping the recent trade backlash and election of Donald Trump. Read more… Gene M. Grossman and Elhanan Helpman. 2018. Identity Politics and Trade Policy. NBER Working Paper No. 25348, December.Gene M. Grossman and Elhanan Helpman. 1994. Protection for Sale. American Economic Review. Wolfgang Mayer. 1984. Endogenous Tariff Formation. American Economic Review.
Keynes and Bown discuss the hotly anticipated US International Trade Commission economic impact assessment of the US-Canada-Mexico Agreement. They explain the ITC use of economic models to show potential effects on the US economy of changing from the North American Free Trade Agreement to the new USMCA. They describe distributional and overall economic impacts arising through the resolution of uncertainty on data and digital information, new rules of origin for the automobile sector, and other policy changes induced by the USMCA. Read more… Soumaya Keynes. The official impact assessment of NAFTA’s replacement is out. The Economist, 27 April 2019. USITC. U.S.-Mexico-Canada Trade Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors. US International Trade Commission Publication Number 4889, April 2019.