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Global Impact of a Protectionist U.S. Trade Policy

Author

Listed:
  • Gabriel Felbermayr

    ()

  • Marina Steininger

    ()

  • Erdal Yalcin

Abstract

When President Trump came into office the US administration launched a detailed analysis of American trade relations. It aimed to identify "unfair trade practices" that are supposedly increasingly being used by other countries, and that are economically damaging to America. This study simulates potential protectionist trade policies on the part of the USA using historical data. The results enable a comprehensive analysis of the political debate and, above all, of its meaningfulness. The study illustrates that the USA does actually face economic imbalances, and especially high trade deficits, which are increasingly causing upsets in individual branches within the States. At the same time, however, the study also makes it clear that the solution to such economic challenges does not lie in a protectionist trade policy. On the contrary, such a policy would only exacerbate problems in the long term. The study ends with a policy recommendation for the USA and the functioning, rule-based, multilateral trade system.

Suggested Citation

  • Gabriel Felbermayr & Marina Steininger & Erdal Yalcin, 2017. "Global Impact of a Protectionist U.S. Trade Policy," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 89, July.
  • Handle: RePEc:ces:ifofob:89
    as

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    File URL: http://www.cesifo-group.de/DocDL/ifo_Forschungsberichte_89_2017_Yalcin_etal_US_TradePolicy.pdf
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    References listed on IDEAS

    as
    1. Jung, Benjamin, 2012. "Gradualism and dynamic trade adjustment: Revisiting the pro-trade effect of free trade agreements," Economics Letters, Elsevier, vol. 115(1), pages 63-66.
    2. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    3. Head, Keith & Mayer, Thierry & Ries, John, 2010. "The erosion of colonial trade linkages after independence," Journal of International Economics, Elsevier, vol. 81(1), pages 1-14, May.
    4. Rahel Aichele & Gabriel Felbermayr & Inga Heiland, 2014. "Going Deep: The Trade and Welfare Effects of TTIP," CESifo Working Paper Series 5150, CESifo Group Munich.
    5. Gabriel Felbermayr & Rahel Aichele & Inga Heiland, 2016. "Going Deep: The Trade and Welfare Effects of TTIP Revised," ifo Working Paper Series 219, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," Review of Economic Studies, Oxford University Press, vol. 82(1), pages 1-44.
    7. Caroline Freund & Joseph E. Gagnon, 2017. "Effects of Consumption Taxes on Real Exchange Rates and Trade Balances," Working Paper Series WP17-5, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Walter, Timo, 2018. "Trade and welfare effects of a potential free trade agreement between Japan and the United States," Hohenheim Discussion Papers in Business, Economics and Social Sciences 16-2018, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

    More about this item

    Keywords

    Außenhandel; Außenwirtschaftspolitik; Protektionismus; Zoll; Handelshemmnisse; Auslandsinvestition; NAFTA-Staaten; WTO-Recht; USA; Welt;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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