In President Donald Trump’s executive order calling for reciprocal tariffs, he said that their main purpose is to reduce the US trade deficit. Economists have long argued that tariffs have no effect on trade balances.
Trump’s tariffs: Disregarding lessons from history and scenarios and probable outcomes
History is full of evidence that tariffs harm economic performance. This column assesses the two waves of globalisation in modern history and how they were interrupted by barriers to trade. The first wave started in the mid-19th century and lasted until WWI, while the second wave started after WWII and lasted until the Global Crisis of 2008-09. The most likely scenario going forward will feature tariffs around 12-14% on average, a mild recession, and a small hit to US longer-run potential. However, achieving diplomatic normalcy may take years of good US behaviour, and it is unlikely during the Trump administration.
Canada's retaliatory tariffs worth $27.6 billion take effect as trade rift with U.S. deepens
Duties on U.S. steel and aluminum products have doubled to 50% as a war of words between Washington and Ottawa continues.
U.S. and Canada fall deeper into a trade war with new tariffs as talks collapse and blame is spread
President Donald Trump’s import taxes will hit about 5% of what Canada ships to the United States every year, including products ranging from hockey sticks to tongue depressors.
Une note sur les déficits commerciaux et l’industrie
Traduction française du billet de blog "A note on trade deficits and manufacturing. Some perspective on the eve of trade war" de Paul Krugman
Move fast and break kings
There is another policy response to tariffs, one that will substantially lower prices for Canadians, while incubating profitable, export-oriented Canadian tech firms, whose products can be sold by community-based small and medium enterprises, to the benefit of the Canadian news and culture industry, Canadian software firms, and Canadian consumers.
Analytique des déficits commerciaux et de l'emploi manufacturier
traduction française du billet de blog "Analytics of trade deficits and manufacturing employment" de Paul Krugman
Canadian Prime Minister Mark Carney calls new U.S. tariffs ‘a miscalculation’ after trade talks collapse
The U.S. import taxes will apply to hockey sticks, building materials, liquors and certain kinds of clothing. Carney said “Canada will match those tariffs dollar for dollar.”
Ce sont les consommateurs américains, non les étrangers, qui payent les droits de douane de Trump
traduction française du billet de blog "How goes the trade war? Consumers, not foreigners, are paying the Trump tariffs" de Paul Krugman
The AI spending boom could have real consequences for the U.S. economy
As revisions to U.S. jobs numbers call into question economic growth, Big Tech is becoming an even more important part of American prosperity.
The Weaponized World Economy
When Washington announced a “framework deal” with China in June, it marked a silent shifting of gears in the global political economy. This was not the beginning of U.S. President Donald Trump’s imagined epoch of “liberation” under unilateral American greatness or a return to the Biden administration’s dream of managed great-power rivalry. Instead, it was the true opening of the age of weaponized interdependence, in which the United States is discovering what it is like to have others do unto it as it has eagerly done unto others.
Le très mauvais excédent de mille milliards de dollars de la Chine
traduction française du billet de blog "China’s very bad, no good trillion-dollar trade surplus" de Paul Krugman
Strategic interdependence is rewiring the global economy
It is no longer sufficient for the US-China trade relationship to be driven solely by cost and efficiency
Opinion | One Senator’s Plea for Tariff Breaks
How protectionism works in practice: Public support, but seeking exemptions in private.
Is Dollar Dominance Good for the U.S.?
Thoughts on the U.S.'s so-called exorbitant privilege.
US Energy Secretary Wright says diesel export ban won't work
US Energy Secretary Chris Wright on Wednesday said a US ban on diesel exports would not work and could push up gasoline and jet fuel prices, a stance at odds with President Donald Trump, who is backing the idea.
Looking for a “fair” international monetary system
President Trump’s Chief Economic Adviser, Stephen Miran, has claimed that the international monetary system in which the US provides the rest of the world with a safe, liquid asset is “unfair” as it supposedly prevents the US from eliminating its current account deficit. His proposed solution is to lower the value of the dollar through coordinated currency market intervention by foreign central banks. This column finds the idea that there could be lasting reversal of exchange rates following an international currency agreement highly speculative, and argues that a multipolar system would attenuate the Triffin dilemma and provide the US with a deficit-adjustment tool.
