Canada is America’s second largest trading partner. In 2023, of the $416 billion of imported goods from Canada, $119 billion is oil and gas, and petroleum products and coal. (Total merchandise imports is $3.1 trn.) From the Milwaukee Sentinel Journal today:
Category Archives: Trade Policy
On the Eve of (Trade) Destruction*
The White House has confirmed imposition of tariffs on Canada, Mexico, and China tomorrow (Feb 1). Why are tariffs on Canada and Mexico different than (some) other tariffs? Consider this graph courtesy of Bloomberg via Torsten Slok:
Trump: Bringing Grocery Prices Down [sic] – Coffee Edition
Productivity, Demand and Manufacturing Employment
Is the decline in manufacturing employment due to trade competition? Insights from a decomposition.
The American People on the Incipient Tariffs
From a fascinating paper by Oli Coibion, Yuriy Gorodnichenko and Michael Weber, “The Upcoming Trump Tariffs: What Americans Expect and How They Are Responding“:
CBO on the “Trump 10/60 Tariffs”
That’s my name for Trump’s 10% universal tariffs plan augmented with additional 60% on Chinese-made imports. h/t to Torsten Slok for the CBO letter. I show implied effects on PCE deflator inflation, and GDP relative to January 2025 CBO projection.
“… the turn of the 21st century was a significant inflection point in the US economy. “
A reader sends me a missive with this line, and (among others) a picture of manufacturing employment. I reproduce (on an annual basis) this series back to 1960 in the figure below.
Miran’s Manifesto
The nominated CEA chair designate, Stephen Miran, has an exposition (h/t Politico)of how protectionism and a depreciating dollar can go together. As far as I can make out, it involves massive forex intervention, possibly sterilized, along with “user fees” on foreign held-UST’s…
Intra-industry Trade Estimated
Oren Cass argues the idea of comparative advantage driving trade is outdated. I agree to a certain extent, but he doesn’t explain why. I’d say intra-industry trade (IIT) – a staple of academic research since the 1980s – is one reason, but that does not provide justification for protection. In fact, his ignorance of IIT suggests his case for protectionism is ill-founded.
When Econ 101 Isn’t Enough: Oren Cass on Trade
In Tuesday’s NYT, Oren Cass makes the case for protectionism.