Diplomatist Magazine Diplomatist July 2018 | Page 26

COVER STORY
THE NEW U.S.
PROTECTIONISM AND
THE DANGER OF A
GLOBAL TRADE WAR
BY MICHAEL FRENKEL 1 AND BENEDIKT WALTER 2 *
P
rotectionism is on the rise in the United States. It is
unusual for such tendencies to occur during times when
an economy is doing well and unemployment is very
low. Protectionism typically fl ies high in times of economic
diffi culties. However, since Donald Trump became President
of the United States in November 2016, the U.S. has seen
a resurgence of protectionist policies. Trump, as witnessed
during his election campaign and in the months after the
election, caters to a group of Americans who believe that other
countries are responsible for forcing structural change upon
the United States. Although many studies show that structural
economic changes primarily result from technological change
and not from international trade, a sizable share of the U.S.
population either ignores or does not believe these fi ndings.
Since coming into offi ce, President Trump has continually
reiterated his belief that other countries are responsible for
the defi cit in U.S. trade and current accounts. In this regard,
he has singled out individual countries and questioned the
prevailing bilateral trade imbalances. The figure below
shows that the U.S. indeed runs sizable trade defi cits with
26 • Extraordinary and Plenipotentiary Diplomatist • Vol 6 • Issue 7 • July 2018, Noida