Friday, November 11, 2016

Tyler Cowen on What to Expect From Trump Trade Policy

It looks like Tyler nails this one. He writes:
I...expect U.S. trade relations to worsen significantly.... I foresee Trump renegotiating the North American Free Trade Agreement, mostly picking on Mexico. Mexico would end up having to pay some kind of fee, either directly or indirectly, for continuing access to the U.S. market. That way, Trump could in fact make Mexico “pay for the wall.” It is no surprise that the peso plummeted as the tide started to turn in Trump’s favor Tuesday night.   
I think Trump will bring more suits against China through the World Trade Organization. That will worsen relations in the Pacific without bringing manufacturing jobs back to the U.S. But as long as Trump can claim he has done something on the China and trade front, I don’t think he will start off by going further than that... 
Overall, my biggest worry is that a Trump administration will herald a new age of geopolitical instability in the Pacific, in the Baltics, and perhaps in other parts of the world. That would hurt the global economic order and turn the U.S. inward, damaging global liberty to the detriment of the American republic.

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