From Reuters:
Category Archives: Trade Policy
Guest Contribution: “Globalisation and the Efficiency-Equity Trade-off”
Today we are pleased to present a guest contribution written by Roland Beck, Virginia di Nino and Livio Stracca (all at the European Central Bank). The views expressed belong to the authors and are not necessarily shared by the institutions to which the authors are affiliated.
Wisconsin Goods Exports during the Trump Trade War
Even before Covid-19 struck, Wisconsin exports were declining despite a sideways-trending dollar…
Guest Contribution: “How Tariffs Affect China’s Exports”
Today, we’re fortunate to have Willem Thorbecke, Senior Fellow at Japan’s Research Institute of Economy, Trade and Industry (RIETI) as a guest contributor. The views expressed represent those of the author himself, and do not necessarily represent those of RIETI, or any other institutions the author is affiliated with.
Steel Employment and Production
Employment and production were declining before the pandemic. March employment is roughly the same as three years ago. Production is down 7.8% in April vs. three years prior.
Steel Tariffs and Iron/Steel Prices
The Section 232 tariffs on steel and aluminum were a bad idea during the Trump administration. They’re still a bad idea.
US Agriculture and the Global Economy
Some recent research from the agency Mr. Trump found too meddlesome, and Mr. Mulvaney tried to dispatch (i.e., the USDA’s Economic Research Service):
The Trade Balance: Macro Dominates Tariffs
Like I said four years ago. By Trump’s own criterion, the trade war was lost. My view – that was a stupid criterion in any case.
“Re-examining the Effects of Trading with China on Local Labor Markets: A Supply Chain Perspective”
From the paper by Zhi Wang, Shang-Jin Wei, Xinding Yu & Kunfu Zhu:
The United States imports intermediate inputs from China, helping downstream US firms to expand employment. Using a cross-regional reduced-form specification but differing from the existing literature, this paper (a) incorporates a supply chain perspective, (b) uses intermediate input imports rather than total imports in computing the downstream exposure, and (c) uses exporter-specific information to allocate imported inputs across US sectors. We find robust evidence that the total impact of trading with China is a positive boost to local employment and real wages. The most important factor is employment stimulation outside the manufacturing sector through the downstream channel. This overturns the received wisdom from the reduced-form literature and provides statistical support for a key mechanism hypothesized in general equilibrium spatial models.
Ungated version here. This is a slightly older paper (2018). A paper with related findings by Feenstra and Sasahara (2018) here, while ungated working paper version is here.
This is a reminder that import competition has direct impacts, but international trade allows firms access to lower cost inputs, and benefiting from comparative advantage. Separate from the question of net benefits is whether costs imposed on those negatively impacted outweigh those who gain, either in dollar or “util” terms.
Winning (per Trump Dictionary)! US-China Trade
Chad Bown, US-China Phase 1 Tracker:
No matter how you look at it – use data on China’s imports or US exports – through November, China purchased only slightly more than half of the US goods Trump pledged it would buy over all of 2020 under his Phase One deal.
