Trump’s Trade-War Miscalculation
Why the Trade Arithmetic Favors China
Trump Makes America Irresponsible Again
Trump’s Tariffs Could Nullify Tax Cut, Clouding Economic Picture
Impact of US-China Trade Conflict on Third Parties
Trade Blocs and Trade Wars during the Interwar Period
ABSTRACT
What precisely were the causes and consequences of the trade wars in the 1930s? Were there perhaps deeper forces at work in reorienting global trade prior to the outbreak of World War II? And what lessons may this particular historical episode provide for the present day? To answer these questions, we distinguish between long-run secular trends in the period from 1920 to 1939 related to the formation of trade blocs (in particular, the British Commonwealth) and short-run disruptions associated with the trade wars of the 1930s (in particular, large and widespread declines in bilateral trade, the narrowing of trade imbalances, and sharp drops in average traded distances). We argue that the trade wars mainly served to intensify pre-existing efforts towards the formation of trade blocs which dated from at least 1920. More speculatively, we argue that the trade wars of the present day may serve a similar purpose as those in the 1930s, that is, the intensification of China- and US-centric trade blocs.
Bloomberg notes:
“Republicans who claim to stand for free trade — a longstanding party principle — have lacked the courage of their convictions. And those who complained bitterly about presidential overreach by Barack Obama have been awfully quiet about this president’s flagrant abuse of executive authority. They should stop quivering and start legislating”.