Donald Trump’s tariffs reflect changes in globalized countries over the past decade – many in the EU feel the same about China: Jeffry Frieden
Q: What is the core of your research?
Answer: I am interested in the intersection of international politics and international economics.
Q: How to seek the largest capitalist state of trade protectionism and a communist state that controls capitalist manufacturing?
Answer: First, capitalism not only proposes a form of economic policy. Europe began to most capitalism since the 15th century, but most European powers were highly protected-mercantile-mercantile corporations using military forces to maintain closed colonial enterprises that restricted economic activities to the metropolitan empire states. This capitalism is highly protectionist, militarized, extracted, and operated by huge monopoly cartels such as East India Company. Since the late 1940s, after the World War, an increasingly integrated global system has emerged, with the leadership of the United States, commodity trade and capital flowing relatively freely, and widely accepting the desirability of the openness of the international economy. The U.S. commitment has been questioned since 2016 – 2016 is indeed a watershed as candidates seek presidential nominations from American parties, Bernie Sanders and Donald Trump, on a platform that is clearly hostile to international trade. Not long after, Brexit (British exit from the EU) took place – both events marking a fundamental shift in the international order. Trump’s trade war is now the culmination of a process that has been developing for 10 years.
Meanwhile, China has been an extraordinary beneficiary of the open international system – the world has seen amazing growth in Asian economic growth over the past 50 years, raising 2 billion people in absolute poverty among China, India, Vietnam and others.
However, China has also adopted policies that underestimate its exchange rate, subsidize exports, intervention in foreign markets to drive its commodities, etc. Over the past 15 years, the United States, Canada, Japan, Japan and others have been consistently worried about China. The concern about China’s pursuit of policies seems to have grown from a very low basis, but now threatening its basis, which seems acceptable. In addition, China is still ruled by the Communist Party. There are a large number of state-owned enterprises and the government provides huge subsidies for economic activities. China remains an unusual hybrid of state capitalism and communism – likewise, many trading partners feel that Beijing has evaded the rules of the game, giving it an unfair advantage while imposing costs. This is not only the Trump administration’s perception – many people in the EU, etc., feel this too.
Q: How does globalization reduce economic inequality in China, but add it in the United States?
A: Over the past 50 years, the world has become more equal, mainly due to the rapid growth of poor countries. Some do think that China in 1980 is more equal than today – but despite the equality gap, most Chinese may prefer today’s economic growth.
Meanwhile, over the past 40 years, the U.S. has grown over the vast majority, with income distribution bias – the top 25% getting better, while the lowest 75%, especially the middle 50%, remains stagnant. The per capita U.S. GDP doubled in 50 years, but the median household real income (about 50 percentage points) grew slowly, 15%.
Q: What factors can explain this imbalance?
A: This part is a “college premium” or benefit to higher education – only one-third of American adults have this and gets a huge benefit for it. Given the speed of technological change and the need for skills, those without it are already behind.
Another reason is globalization.
Opening up the U.S. economy, especially importing to low-wage developing countries, frustrate American workers’ wages. In the 1960s, New York was the largest industrial center in the United States – it had one million and a half million manufacturing workers, and the entire region was dedicated to the apparel industry, furniture, toys, buttons, etc. – all of which went into developing countries.
This is an incredible change for the United States. Imports from Mexico, Brazil and China, especially after the “China Shock” in 2001, many regions, especially the Midwest and Upper Town industrial belts. As people lose their jobs, local property values and taxes decline, schools, infrastructure, law enforcement and others shrink. The dynamic people left and the town fell into a decline. However, the government remains focused on the new “knowledge economy”, so the United States is now a very divided country, with the wealthy Northeast, the western coast and the big cities in between, the rest facing despair straits, with deindustrialized towns, high unemployment, constant unemployment, growing drug and alcohol abuse, etc.
These regions feel–to be completely correct, the government has done nothing to help them. They provided the momentum to Donald Trump because he promised to support “left-handed”. The rising populism in the United States and Europe is a prosecution of previous political parties that fail to respond to the majority of the population.
The opinions expressed are personal
