Economics News

"One hope of AGOA [African Growth and Opportunity Act] was labor intensive manufacturing would move into” some of Africa's poorest countries, said Mary Lovely, professor of economics. The comment followed President Trump's announcement of Rwanda's participation in the program.

"A trade war is not inevitable," says Mary Lovely, professor of economics. "But the time is getting very late for us to avoid it."

"The sanctions are a very big deal," says Mary Lovely, professor of economics and senior fellow at the Peterson Institute for International Economics. "The Chinese see them as a major threat and do not want a costly trade war."

Mary Lovely, professor of economics, says the reason why the United States and China have such drastically different tariff rates for imported cars is because of a pre-existing deal between the countries to keep car tariffs high while slashing import taxes on other goods, such as soybeans.

Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs, argues that "restrictive labor regulations have prevented India from reaping the full potential benefits of opening up the economy."

Steve Hagerty’s company helps communities facing disasters — acts of God and acts of terror that would otherwise overwhelm the regular operations of government.

"If there is predatory dumping (along with injury to indigenous firms and local labour), there needs to be an anti-dumping tax (equal to the calculated dumping margin), which is similar to anti-dumping duties on internationally traded goods," says Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs.

The web of relationships and mutual benefits between America and China is too complex to dismiss with campaign rhetoric.

"My concern would not be economic, it would be political," says Professor of Economics Mary Lovely regarding last year's rise in the U.S. trade deficit. “I’m afraid this will be more fuel for an aggressive trade stance toward China, afraid that will lead to retaliation by China, and I think it will cause job destruction in the United States as well as in China.”

Instead of raising tariffs India should have emulated China by reforming labor laws and maintaining a low-tariff regime on intermediate goods to attract export-oriented global manufacturing firms, according to Devashish Mitra, Gerald B. and Daphna Cramer Professor of Global Affairs.

"They raise the already high risk of new U.S. tariffs on Chinese imports, almost certainly to be quickly followed by a carefully targeted Chinese response," says Mary Lovely, professor of economics. "Unfortunately, while destructive of jobs both here and in China, these responses will not move the needle on the U.S. trade deficit."

"Changes in trade policy in 2017 were small and, in any case, unable to move the needle on the deficit," says Professor of Economics Mary Lovely. "If the recent tax cut stimulates spending and business investment in the U.S., as the president hopes, we may well see an even larger deficit for 2018."

President “Xi has really staked his future on the high-tech sectors in China,” Professor of Economics Mary Lovely says about the race between the U.S., China and other nations to develop the next wireless communications technology, known as 5G.

"Right now, trade policy looks very rear-view mirror," says Mary Lovely, professor of economics. "Just worrying about 500 jobs here or 1,000 jobs there seems to miss the need for long-term strategy." 

According to Professor Mary Lovely, a drawback to the hefty tariffs President Trump imposed on imported washing machines and solar panels is that "there will be less innovation in the long term."