In the debate on Monday, Donald J. Trump comments on Nafta’s impact:
You go to New England. You go to Ohio, Pennsylvania. You go anywhere you want, Secretary Clinton, and you will see devastation where manufacturing is down thirty, forty, sometimes fifty percent — NAFTA is the worst trade deal maybe ever signed anywhere but certainly ever signed in this country.
Is a current undervaluation of the Chinese yuan plausible?
Today, we are pleased to present a guest column 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. This is an extended version of a column appearing at Project Syndicate, July 13.
Today we are pleased to present a guest contribution written by Reuven Glick at the Federal Reserve Bank of San Francisco and Andrew Rose at the University of California at Berkeley. The views expressed below do not represent those of the Federal Reserve Bank of San Francisco (FRBSF) or the Board of Governors of the Federal Reserve System. This blog is an updated version of FRBSF Economic Letter 2016-09, March 21, 2016.
“China and Asia in Global Trade Slowdown”
On the eve of the primary votes in Wisconsin, where protectionists are set to make some inroads, it’s of interest to consider the state’s reliance on exports — including those to China (a target of both Senator Sanders and Mr. Trump) and Mexico [1].
Substantial attention has been devoted to the disasterous effects of implementing a Donald Trump agenda of imposing 45% tariffs on imports of goods from China. To gain some perspective, consider the implications for prices of goods imported from China if such a tariff were imposed (and a large country assumption used, so that only half of the tariff increase manifested in increased prices).
Figure 1: Price of Chinese commodity imports, 2003M12=100, with 2016M03 values at 2016M02 values (bold blue), and a 22.5% higher price level as of 2017M02 assuming the half of incidence falls on the US (red). Light green shaded area denotes projection period. Vertical axis is logarithmic. Source: BLS, and author’s calculations.
Obviously, drop the large country assumption, and the resulting price increase can be up to 45%.
Surely, it’s occurred to others, but I find the following comparison of trade policy stances quite remarkable.
Today we are fortunate to have a guest contribution written by Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at Harvard University, and former Member of the Council of Economic Advisers, 1997-99.
I have written a few columns (e.g. “Critics Should Keep an Open Mind,” The Guardian, Oct. 11, 2015) and posts ([1] [2]) this year supportive of TPP. Commentators on my column and critics of TPP more generally have expressed great eagerness to know when and how they could read the full legal text of the agreement. The full text is now available.
Many skeptics seem confident in their ability to understand the significance of the detailed legal language. I am less confident of that myself, not being a lawyer. There is also to be a USTR site with user-friendly text.
This post written by Jeffrey Frankel.