The Wall Street Journal says that a surge in protectionism is threatening to exacerbate our global economic pain. The story’s elements should be familiar to those that follow international trade:
- Lobbies for industries like steel and automobiles are pushing for protection.
- Countries have some room to raise tariffs since bound rates exceed applied tariffs. [As Richard Baldwin stressed]
- Industries’ demand for anti-dumping measures is rising. [As Joseph Francois warned]
- The G20 has been ineffective: “When the group last met, in mid-November, it agreed to ‘refrain from raising new barriers’ to trade or investment over the following 12 months. But a few days later, India increased tariffs on steel, iron and soybeans.” [As Baldwin and Simon Evenett lamented]
That said, this is far from Smoot-Hawley.