Trade Risks and Trade Dependencies in Dystopian Times

Abstract: The Trump administration is treating international trade as a zero-sum game, employing tariffs and other unilateral measures to achieve selected policy goals. Its weaponization of trade is undermining multilateral agreements, intensifying trade friction, exacerbating U.S. trade dependencies, weakening traditional alliances, and contributing to global economic and political instability. U.S policies are leading to friendshoring and derisking, alternatives that are less economically efficient than the benefits offered by the multilateral trade system. The United States need to reassess its trade strategy in light of emerging challenges and broader economic and geopolitical considerations. American politicians and business leaders need to realize the importance of the international rule-based trading system, and support the domestic reforms necessary to absorb the market shocks that the system produces. America’s leaders should revisit the WTO architecture, address fragmentation, and support a revamping of the trading system to cope with 21st century challenges. Its citizens should look inward and make the hard choices that will prepare the United States to play a constructive role in the 21st century. Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.