Courtesy of Mish.
I have been a strong proponent of the notion Trump is likely to start a global trade war.
Others are of the opinion that Trump will not do what he promised.
Politicians lie. Who can argue with that? So, which viewpoint is more likely?
Please consider Donald Trump Threatens the Resilience of World Trade.
Like cats in popular folk wisdom, globalisation appears to have many lives. The integration of markets in goods, services and capital that accelerated in the 1990s with the fall of communism and the rise of China has been written off many times, notably during the global financial crisis. Yet it has survived.
This past year, its obituarists have had more material to work with than usual. The stalling of a number of high-profile trade deals has had the pre-emptive mourners out in force arguing that the engine of liberalisation has failed.
A number of large trade pacts — usually dubbed “free-trade agreements” whether or not they succeed in liberalising commerce — have failed in recent years. But 2016 was notable for two particularly large ones hitting the buffers — the Transatlantic Trade and Investment Partnership (TTIP), involving the US and EU, and the Trans-Pacific Partnership (TPP) of 12 Asia-Pacific economies. Moreover, the trade world was treated to some comic relief late in the year when the smaller pact between the EU and Canada was held up for a while by obstreperous Walloons, the government of Belgium’s francophone region objecting to various provisions therein.
The underlying forces against globalisation are often overstated. But Mr Trump’s election could change everything.
He has already appointed two instinctive protectionists itching for trade confrontation with China, Wilbur Ross and Mr Navarro, to his trade team. It may be up to Congress to restrain the administration’s wilder protectionist impulses — which is a little like putting the toddlers in charge of a nursery.
Globalisation has survived many things, but the rise of mercantilist populism in the form of Mr Trump may be its biggest challenge for decades. The year of 2016 was not a disastrous one for international commerce, but it may prove to be an uneasy calm before the trade wars begin.
Global Trade Wars
I am a huge free trade advocate, regardless of what any other country does.
Trump clearly does not share that view. But will Trump really do what he says? Will Congress go along?
I have an open mind on this, but right now it seems that Trump is more likely than not to do what he says.
Global Trade Wars
