Does free trade have a future?
As China and US threaten more tariffs, the assumptions underlying global free trade system are coming into question.
US President Donald Trump is raising the stakes in his trade dispute with China, and also threatening to take aim at Europe.
On Thursday, his administration said it is considering an additional $100bn in tariffs aimed at Chinese imports.
The move was a response to China’s matching an earlier $50bn set of levies proposed by Washington.
All of this may be just a negotiating position: most of the tariffs that Trump has proposed have not yet been implemented.
But the fact that the two sides have proposed so many tariffs so quickly – as well as recent comments by Trump hinting that the European Union is next on his list – raise a broader question: is the global consensus around free trade coming to an end?
For decades, most of the world’s richest nations, along with many rapidly developing economies, have agreed: Free Trade is good. Protectionism is bad.
There has been a broad acceptance that closed markets make nations poorer while the free flow of goods across borders ultimately benefits everyone.
Since World War II, the United States has taken the lead in promoting this view. Now, however, Washington is emerging as one of its principal opponents.
Whether Trump follows through, and how the rest of the world responds, may determine the future of a trading system that has been nearly 80 years in the making.
Is free trade still the future, and the aspiration, of much of the world?
Presenter: Dareen Abughaida
Guests:
Deborah Elms – executive director, Asian Trade Centre
Scott Lucas – University of Birmingham
Andrew Leung – independent China strategist