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The prevailing trade doctrine pre-Trump is called the most favored nation system, by which the countries of the WTO agreed to treat all other members by the sam

by bloppe 1y ago

The prevailing trade doctrine pre-Trump is called the most favored nation system, by which the countries of the WTO agreed to treat all other members by the same rules. That didn't preclude tariffs at all, but for instance China could not apply a tariff on America without also applying the same tariff on all other WTO members. American multinationals flourished under this system far more than the companies of any other country, including China. Now we have a system of bilateral agreements that encourage market fragmentation and are complicated and cumbersome to enforce, which is a big part of the reason we moved away from that system in the first place. Now, they're also created revoked on a whim by one man with a knack for giving exemptions to his pals and extracting big personal gifts from world leaders in exchange for favors. Even if you support moving back to a bilateral tariff system, the way it's being handled should concern you

hollerith 1y ago
>American multinationals flourished under this system far more than the companies of any other country, including China. International trade has never been a critical or essential component of the US economy -- or at least not during the last 170 years -- because there's always been a healthy domestic consumer market in the US. In the US, the consumer market has constituted close to 70% of all economic activity for over a century. In contrast, when China was starting to get rich in the 1990s and 2000s, the consumer market was tiny. Ditto postwar Japan, South Korea, Singapore and Taiwan. International trade was way way more important to those countries in the post-WWII era that it has been to the US: the US would have remained a rich country even if there was zero international trade (although granted probably not quite as rich). Free trade was used by the security establishment in Washington during the Cold War as a bribe to induce countries to side with the US against the USSR. The bribe was relatively easy to make because the US ended WWI with the world's dominant navy (needed to fight piracy and to guarantee that the smaller countries of the world could engage in international trade on the world's oceans). Some Americans are "globalists", meaning they think the idea of the nation state is obsolete or undesirable, and of course they try to promote economic interdependence between countries as much as possible. Also, even though they have never been essential to the US economy, the big multinationals have significant influence on the public discourse in the US and on Washington. So, the general public estimates international trade as more important than it actually is to the US.

by bloppe 1y ago

hollerith 1y ago

>American multinationals flourished under this system far more than the companies of any other country, including China. International trade has never been a critical or essential component of the US economy -- or at least not during the last 170 years -- because there's always been a healthy domestic consumer market in the US. In the US, the consumer market has constituted close to 70% of all economic activity for over a century. In contrast, when China was starting to get rich in the 1990s and 2000s, the consumer market was tiny. Ditto postwar Japan, South Korea, Singapore and Taiwan. International trade was way way more important to those countries in the post-WWII era that it has been to the US: the US would have remained a rich country even if there was zero international trade (although granted probably not quite as rich). Free trade was used by the security establishment in Washington during the Cold War as a bribe to induce countries to side with the US against the USSR. The bribe was relatively easy to make because the US ended WWI with the world's dominant navy (needed to fight piracy and to guarantee that the smaller countries of the world could engage in international trade on the world's oceans). Some Americans are "globalists", meaning they think the idea of the nation state is obsolete or undesirable, and of course they try to promote economic interdependence between countries as much as possible. Also, even though they have never been essential to the US economy, the big multinationals have significant influence on the public discourse in the US and on Washington. So, the general public estimates international trade as more important than it actually is to the US.