US Trade Research Articles

Why the United States Wants and Needs a Permanently Crippled World Trade Organization

Recent US statements calling for restoring a fully functioning World Trade Organization (WTO) dispute settlement system by 2024 have triggered a wave of optimism that the US blockade of the dispute system may finally be coming to an end. Due to US opposition, the WTO dispute system has been crippled since 2019 and unable to enforce WTO obligations, leaving the WTO in a crisis. These optimistic sentiments are misplaced. Despite its reassuring rhetoric, the United States has no intention of restoring the dispute system to its full powers. The Biden administration boasts that it has adopted a new and transformative modern American industrial policy based on hundreds of billions of dollars in subsidies paid to the US semiconductor, electric vehicle, renewable energy, and other high technology industries. Key elements of this US industrial policy and US trade policies towards China violate US WTO obligations. A fully restored WTO dispute system will allow China, the European Union (EU) and other competitors to attack and overturn current US industrial and trade policies or subject the United States to massive financial penalties. To immunize US policies from attack, the United States wants and needs a WTO dispute system that remains disabled for the indefinite future, if not permanently.

It's not Overcapacity, but a Matter of Global Imbalances

AbstractAgainst the backdrop of geopolitical conflicts and major power competition, the US and several Western nations have claimed that China has significant “overcapacity” in manufacturing and have imposed various tariff and nontariff trade measures to shield domestic industries. Using data from publicly listed companies, this study conducted an industry‐level analysis of investment and capacity expansion in China's manufacturing sector. We find that the growth in manufacturing investment is currently driven mainly by the “new trio” (electric vehicles, solar cells, and lithium batteries), and most enterprises have begun market‐oriented clearing. However, the new trio involved in investment and capacity expansion accounts for only a small portion of China's manufacturing sector. The US narrative regarding China's overcapacity is therefore fundamentally misleading. From the perspective of major power dynamics, the essence of the overcapacity narrative lies in China–US trade imbalances, which are, in turn, a consequence of macroeconomic imbalances between the two nations. Insufficient demand in China and excess demand in the US form the underlying impetus behind the trade imbalances.

Sino–US trade frictions and corporate investment

Sino–US trade frictions and corporate investment

The Future of US Trade Policies: Balancing Domestic Growth and Global Competitiveness

The main objective of this study is to analyze the future trajectory of U.S. trade policies with a focus on achieving a balance between domestic economic growth and global competitiveness. The specific objectives were to: examine the impact of shifts in United States' trade policies and tariffs on the United States' trade relationships with China and other key trading partners; analyze how changes in United States' trade policies and tariffs influence the United States' global economic position; propose solutions and strategies to mitigate the negative effects of United States' trade policy changes while enhancing the United States' global economic competitiveness. This study adopted a survey research design on a sample size of 100 respondents, purposively selected for their expertise and direct involvement in matters related to U.S. trade policy and global economic competitiveness. Primary data were collected using a structured questionnaire. The data were analyzed using frequency analysis and mean point analysis, which revealed that: shifts in U.S. trade policies, particularly the imposition of tariffs, have had a noticeable impact on trade volume, trade tensions, and business behavior, with the highest agreement on the uncertainty created for global trading partners, especially China; changes in U.S. trade policies, particularly those involving tariffs and protectionist measures, have had a negative impact on the U.S.'s global economic position, since these policies have weakened the U.S.'s standing, resulted in a loss of competitive advantage, and contributed to higher consumer prices that undermine economic competitiveness; multilateral trade agreements and strengthening the domestic supply chain are perceived as the most effective solutions to mitigate the challenges of shifting trade policies while enhancing U.S. global competitiveness, while innovation and balanced trade policies also receive substantial support. The study recommends that the US should pursue a strategy of diplomatic engagement with China, focusing on mutual interests such as climate change and technology collaboration, while negotiating for greater market access, intellectual property protections, and fairer trade practices.

Research on the Impact of America’s Trade Wars and Protectionism on the Global Economy and China’s Coping Strategy

The objective of this paper is to examine the influence of the US trade war and protectionism on the global economy and on the Chinese economy and to put forward recommendations for addressing these issues. The rationale for selecting this topic is that shifts in the global trade landscape have posed significant challenges for the Chinese economy, necessitating a comprehensive examination of these issues for informed policymaking. The paper commences with an account of the US-China trade war that commenced in 2018. This conflict has had a detrimental effect on China’s exports in high-value-added sectors and has brought to light the Chinese economy’s excessive reliance on a single market. Subsequently, an analysis is presented of the gradual development of the domestic economy, the dearth of consumer spending power, and the obstacles faced by small and medium-sized enterprises (SMEs) in pursuing industrial modernisation. In the problem analysis, three principal issues were identified: overdependence on the US market, weak domestic consumption capacity, and the challenges faced by SMEs. Specific solution strategies are put forth to address these issues, including diversification of export markets, enhancement of residents’ income and promotion of consumption, and support for technological innovation and digital transformation of SMEs. The objective of this paper is to provide policymakers with effective recommendations for the stable and sustainable development of the Chinese economy. In addition to addressing current economic problems, these recommendations will contribute to the growth of related industries.

The spillover effect of US and China’s economic policy uncertainties on RMB internationalisation

ABSTRACT Utilizing the TVP-VAR-based connectedness approach, this paper investigates the spillover effect of the US and China’s categorical EPUs on RMB internationalisation. The results show that the EPUs have a negative disturbance on RMB internationalisation which has been strengthened since the RMB exchange rate reform in 2015. Specifically, the RMB internationalisation is vulnerable to China’s foreign exchange policy and monetary policy uncertainties. Furthermore, since the launch of the series of ‘America First’ policies and the escalating trade conflicts with China, the spillover effect of the uncertainties relating to US trade policy and China’s trade policy has increased significantly.

The local effects of the first Golden Age of Globalization: Evidence from American ports, 1870–1900

AbstractThis paper uses digitized US trade flows data at the customs district level from 1870 to 1900 to investigate whether trade shocks had an effect on the size and composition of the population of US ports and on their economic activity. I find that trade increased the population of districts, driven principally by growth in urban populations, and that manufacturing activity also increased. However, these results dissipate rapidly with distance: counties adjacent to ports do not see similar gains from trade booms at nearby ports. My results imply that trade was a contributing factor in the structural transformation of America's economy.

Impacts of Trade Policy Uncertainties on US-China Bilateral Trade

The escalating Sino-US trade war has led to a global economic contraction and increased trade policy uncertainties. This study examines the impacts of the US and China’s Trade Policy Uncertainties (TPU Indexes) on these countries’ Bilateral Trade Balances (BTBs). Empirical findings reveal that both increases and decreases in the TPU Indexes of both the US and China significantly affect their respective BTBs. Furthermore, it can be concluded that China’s trade policy or Chinese exporters-importers react to China’s trade policy uncertainty within China more than the US trade policy or US exporters-importers to US trade policy uncertainty within the USA. Another important conclusion is that China’s trade policy or exporters-importers react more to their own trade policy uncertainty than the US’s trade policy uncertainty within China. The policy implications generated from the empirical findings of this study for policymakers in both countries are presented in the paper’s final section.

Trade fragmentation unveiled: five facts on the reconfiguration of global, US and EU trade

Trade fragmentation unveiled: five facts on the reconfiguration of global, US and EU trade

Что ищет он в стране далекой? Факторы заинтересованности государств Латинской Америки в БРИКС

The intention of Latin American countries to join the BRICS reflects a dynamical change in the international geopolitical landscape, where they are looking for new alliances and opportunities to diversify external relations and gain strategic advantages. BRICS as a coalition promotes global governance reforms by representing interests of states seeking to transform the existing world economic and political order. Membership in the bloc brings a high level of recognition from partners and allies, as well as from other actors such as international financial institutions. Furthermore, the BRICS can give an opportunity for countries on the periphery to become part of a group of power centers. Its cooperation mechanisms provide not only a platform for trade and economic development, but also a prospect for developing countries to play more significant role in decision-making and to become active participants in creating new international regulations. These factors determine the key imperatives for Latin American countries’ entry into the bloc. The study focuses on five states in the region that have applied for membership ahead of the XVIth BRICS’ summit 2024 in Russia. They are Bolivia, Venezuela, Honduras, Cuba, and Nicaragua. The tasks of diversifying commercial ties and finding resources for socio-economic development are of paramount importance for Latin American countries. Priority is given to cooperation formats that are most complementary in terms of bilateral trade growth and integration. Bolivia’s key interest lies in attracting potential investors for the industrial sector, particularly lithium extraction. La Paz can offer cooperation in areas such as energy, mineral, and food production. Membership in BRICS may assist Venezuela in achieving several objectives, including solving economic problems and overcoming political ambiguity in international relations. Caracas, sanctioned by the US, expects to get international support from BRICS and expand its commercial opportunities through alternative mechanisms in international trade. Honduras aims mainly to access New Development Bank funding and joint projects through BRICS. Havana is interested in attracting international attention to the primary Cuban demand for the lifting of the US trade embargo. As for Nicaragua, BRICS membership meets the foreign policy tenets of the government seeking to strengthen its counterweight to US influence in the region, among other benefits. It can be expected that the deepening of cooperation between the five countries and the BRICS, with a special focus on cooperation with Russia, China, and India, will continue. Moreover, the ideological orientations of current governments and their commitment to reducing the influence of the United States in regional and global level confirm that the inclusion of Bolivia, Venezuela, Cuba, Nicaragua, and Honduras, to a lesser extent, may contribute to strengthening the anti-Western agenda within the bloc. The convergence of economic and political interests indicates a long-term trend toward Latin America’s participation in various formats of multilateral cooperation, integration into international financial mechanisms, and promotion of further interaction with the non-Western part of the globe. Considering the upcoming rotation of presidencies, which transferred 2025 to Brazil, the importance of the Latin American region for the BRICS is likely to increase.

The Historical Development of Section 301 of the US Trade Act

The Historical Development of Section 301 of the US Trade Act

Economic policies, financial markets, and global currency dynamics shaped by US trade tensions.

Economic policies, financial markets, and global currency dynamics shaped by US trade tensions.

Does Uncertainty Affect the Banks’ Non-Performing Loans/Non-Performing Finance in the MENA Region? A Comparison Study Between Conventional and Islamic Banks in the MENA Regions

This study investigates the impact of uncertainties on the non-performing loans/ finance (NPL/NPF) of conventional and Islamic banks in the MENA region using data from 2005 to 2022. Based on inclusion and exclusion criteria and the purposive sampling technique, 92 banks were selected from 13 MENA countries, 42 of which are Islamic and 50 of which are conventional banks. The study used two estimation methods: Augmented Mean Group (AMG) and two-step Generalized Method of Moments (GMM) to estimate the relationship between uncertainty and NPL/NPF. These estimation methods were chosen for their ability to provide unbiased results in the presence of cross-sectional dependence and deal with endogeneity. The study revealed that world pandemic uncertainty had a negative and significant influence on the NPL of conventional banks while showing a positive and significant influence on the NPF of Islamic banks. US trade policy uncertainty was found to have a negative and significant influence on the NPL of conventional banks. In contrast, it exhibited a positive and significant influence on the NPF of Islamic banks. We discovered a positive and significant influence of US sovereign debt risk uncertainty on the NPL/NPF of conventional and Islamic banks in the MENA region. The findings revealed a negative and significant influence of oil price uncertainty on the NPL/NPF of conventional and Islamic banks in the MENA regions. These findings reassure us that bank in the MENA region should adopt and tailor risk strategies based on sector-specific responses, engage in proactive risk monitoring, and maintain loan quality amid economic uncertainties.

On the Road to the Split of the American Labor Movement: Criticism of the American Federation of Labor In Committee for Industrial Organizations Pamphlets (1935–1936)

The US labor movement gained momentum after the passage of the NIRA (1933) and especially the Wagner Act (1935). The new law guaranteed employees the right to organise and bargain collectively through representatives of their own choosing. The dynamic growth in union membership was accompanied by a heated debate over whether unions should be organised to cover all workers in an industry or on an occupational or craft basis. This piece covers Committee of Industrial Organizations (CIO) pamphlets published between 1935 and 1936, a critical period in the rivalry between the American Federation of Labor (AFL) and the CIO. Most took the form of journalistic commentary on current events in the union environment. The pamphlet, as a form of communication, by definition, presents a one-sided description of reality. Nevertheless, the CIO pamphlets are a valuable source of knowledge about the division in the American labor movement in the 1930s. In this piece, I examine the axes of contention and arguments. They cover various issues, such as an assessment of the US trade union movement’s achievements, jurisdictional claims, industrial charters, and dues. I trace the evolution of radicalism in the views of the CIO leadership, from reforming the Committee in the spirit of “unionising unorganised mass production under the banner of the AFL” to massive criticism of the Federation that ultimately made further coexistence impossible. The latter resulted in the AFL suspending the CIO in September 1936.

US sanctions and the reshaping of Chinese innovation strategies

PurposeAs the China–US trade tensions escalate, the implementation of US sanctions has imposed severe restrictions on the innovation resources of Chinese firms. This study introduces the theory of peer effect to investigate whether US sanctions stimulate a homogenization of innovation strategies among Chinese companies in the same industry, thereby giving rise to an innovation peer effect.Design/methodology/approachThis study utilizes a sample of 4,078 A-share listed companies from 2015 to 2021 and employs a multi-period difference-in-differences (DID) model for analysis.FindingsThe findings indicate that US sanctions significantly stimulate innovation inputs among companies in the same industry, but concurrently, they suppress innovation outputs. Moreover, a higher degree of internationalization weakens the promotion of innovation inputs by US sanctions and amplifies the inhibitory effect on innovation outputs. A high proportion of long-term loans offsets the negative impact on innovation outputs, whereas a high proportion of short-term loans diminishes the positive impact on innovation inputs.Research limitations/implicationsThis study elucidates how external shocks impact companies’ innovation capabilities within the same industry, offering a fresh perspective on understanding the influence of China–US trade tensions on innovation among Chinese firms.Practical implicationsChinese firms should view US sanctions-induced technological challenges as opportunities, fostering breakthrough innovations through industry-academia collaboration. Balancing risk and reward is also key when navigating technological innovation and global strategies.Originality/valueThis study comprehensively reflects the impact of the US sanctions on Chinese firm innovation. It lays the foundation for analyzing the transmission mechanism of other trade policies under the framework of trade friction theory.

Operationalizing Package Treaties: A US Case Study

AbstractThis article studies the incorporation of package treaties in domestic law and administrative practice, including the functions these treaties serve once in force. This sketch of the domestic operationalization offers a window into the institutional design choices that shape how lawmakers craft the regulatory ecosystem in which flanking policies are carried out. The typology for understanding how governments situate package treaties in their domestic regulatory spaces is introduced, arguing that the ‘package’ of legally binding trade liberalization commitments and mutually agreed flanking policies is shaped by both legislative and regulatory choices that are often underestimated and overlooked. DUS trade agreements are used as a case study, finding that the US government's treatment of each of its trade agreements tends to follow a common pattern: only a small part of the agreement is transposed into domestic law; complex and robust institutions are built around the agreement to embed it deeply into the trade policy work of the executive branch; and, the entrenchment of US trade agreements has a significant enabling effect across a wide range of cross-border regulatory engagements that US agencies think of as ‘monitoring’ or ‘enforcing’, among other labels. Finally, the policy choices against the goals laid out by proponents of package treaties are assessed.

Trade under trade policy uncertainty: The moderating roles of US preferential trade agreements and their heterogenous effects

Trade under trade policy uncertainty: The moderating roles of US preferential trade agreements and their heterogenous effects

Tonia Novitz, Trade, Labour, and Sustainable Development: Leaving No One in the World of Work Behind Edward Elgar Publishing, 2024 - Kevin J. Middlebrook, The International Defense of Workers: Labor Rights, US Trade Agreements, and State Sovereignty Columbia University Press, 2024

Tonia Novitz, Trade, Labour, and Sustainable Development: Leaving No One in the World of Work Behind Edward Elgar Publishing, 2024 - Kevin J. Middlebrook, The International Defense of Workers: Labor Rights, US Trade Agreements, and State Sovereignty Columbia University Press, 2024

Is US trade policy reshaping global supply chains?

Is US trade policy reshaping global supply chains?

The end of ESG? Return spillover between ESG and non-ESG portfolios

The end of ESG? Return spillover between ESG and non-ESG portfolios