Abstract
The purpose of this chapter is to examine the impact of recent changes in US government policies in the areas of international trade, fiscal and financial regulatory affairs and immigration on the global integration of the United States and its leading role in the liberal international economic order. The chapter explains why the implications of those changes are likely to be negative for the current world order. The prospects for the continued, dominant role of the US dollar in the international system are also assessed.
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Notes
- 1.
This document can be accessed at www.whitehouse.gov/wp-content/uploads/NSS-Final-12-18-2017-0905
- 2.
This new approach to international relations on the part of the US government was reinforced by the speech that President Trump made to the General Assembly of the United Nations on September 26, 2018.
- 3.
These data have been drawn from Melitz and Klein (2017).
- 4.
The VAX ratio for China has been drawn from Johnson (2014).
- 5.
This reference to the role of foreign-invested enterprises in China’s export trade is drawn from Lovely and Liang (2018).
- 6.
These results were reported in Amiti et al. (2019).
- 7.
The concerns and complaints of the US government about China’s technology transfer practices were laid out in a report of the Office of the US Trade Representative, “Findings of the Investigation into China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation Under Section 301 of the Trade Act of 1974” (March 24, 2018), which can be accessed at ustr.gov/sites/default/files/Section%20301%20FINAL.PDF
- 8.
Many of the points made in this and the preceding paragraphs were discussed by Anne Krueger in an article published by Project Syndicate, “The Global Trading System Could Break Down” (Project-Syndicate.org, September 17, 2018).
- 9.
These projections are based on the analysis of the Congressional Budget Office and can be found in “The 2018 Long-Term Budget Outlook” Publication #53919 (June 26, 2018) and “An Update to the Economic Outlook: 2018–28” Publication #54318 (August 13, 2018).
- 10.
A good discussion of the evolution and determinants of global imbalances can be found in Obstfeld (2018).
- 11.
The research behind the data on the premium or “convenience yield” of US government debt is discussed in “Long-Term US Treasury Bonds Have Lost Their Specialness” The NBER Digest (October 2017) pp. 2–3.
- 12.
For a discussion of recent efforts of the CBP to expand their internal searches for illegal immigrants, see Del Bosque (2018).
- 13.
The impact of the government’s decision on the two visa programs discussed in this paragraph is discussed by Bier and Andersen (2018).
- 14.
Many of the technological changes that are likely to drive the future course of economic globalization are discussed in Baldwin (2016).
References
Amiti, Mary, et al. 2019. The Impact of the 2018 Trade War on US Prices and Welfare. CEPR Discussion Paper # 13564 (March 2019).
Baldwin, Richard. 2016. The Great Convergence: Information Technology and the New Globalization. Cambridge, MA: Belknap Harvard University Press.
Bier, David, and Stuart Andersen. 2018. White House Bans 22 Million Immigrants over 5 Decades. Cato at Liberty, January 29. www.cato.org
Del Bosque, Melissa. 2018. Checkpoint Nation: Border Agents Are Expanding Their Reach into the Country’s Interior. Harper’s Magazine, October, 35–52.
Johnson, Robert C. 2014. Five Facts about Value-Added Exports and Implications for Macroeconomics and Trade Research. Journal of Economic Perspectives 28 (3): 119–142.
Lovely, Mary, and Yang Liang. 2018. Trump Tariffs Primarily Hit Multinational Supply Chains, Harm US Technology Competitiveness. Peterson Institute for International Economics Policy Brief #18-12 (May 2018).
Melitz, Marc, and Michael Klein. 2017. What Do We Learn from Bilateral Trade Deficits? Econofact (Tufts University), May 25.
Obstfeld, Maurice. 2018. Twenty-Five Years of Global Imbalances. CEPR Discussion Paper #13066 (July 24, 2018).
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Elson, A. (2019). Current US Economic Policy and the Outlook for Globalization. In: The United States in the World Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-20688-8_7
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DOI: https://doi.org/10.1007/978-3-030-20688-8_7
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