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The tariff man returns

Published 12 November 2024

Trump’s re-election is likely to reshape global trade dynamics, driven by influential appointees like Robert Lighthizer. His tariff and immigration policies could raise costs, disrupt trade flows, and upend the global economy, while Asian economies brace for possible economic fallout. Meanwhile, BRICS nations and "New Neutral" countries are increasingly positioning themselves as alternatives to a US-dominated world order. Check out what we have been reading on the impact of US elections on the global economy.

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What Trump 2.0 entails | The rest of the world seeks alternatives | More research from Hinrich Foundation

What Trump 2.0 entails

Personnel will drive policy

Politico explores who might make up Trump’s cabinet. With Robert Lighthizer high on the list to return as USTR or in another key economic position, Edward Alden in Foreign Policy profiles the man who would help Trump upend the global economy, and the Financial Times publishes Lighthizer’s op-ed explaining how Trump’s trade remedies reflect America’s troubled reality. Alan Beattie in the Financial Times looks at the internal rivalries that will determine Trump’s trade policies.

Trump’s trade and immigration policies may have a strong economic impact – in the US and globally 

The Economist finds that Trumponomics excites markets but frightens the world. Sam Lowe in Most Favoured Nation previews the Tariff Man’s return. Reuters reports that Trump’s tariffs would reorder trade flows, raise costs, and draw retaliation. Yale University’s Budget Lab gives the fiscal, macroeconomic, and price estimate of tariffs. Clark Packard and Scott Lincicome of the Cato Institute analyze Presidential tariff powers and the need for reform. Ed Gresser of the Progressive Policy Institute demonstrates how Trump’s first term tariffs resulted in a manufacturing deficit. Trump’s immigration policies would make food inflation worse, reports Bloomberg. 

Asian economies brace for impact 

South Korea’s economy would shrink under Trump’s tariffs, reports Bloomberg. China is scrambling to counter a second Trump shock, finds Reuters. China’s playbook won’t work this time, writes Jacky Wong in the Wall Street Journal.  

Impact on CHIPS Act implementation 

Bloomberg reports that Trump’s win sets off a race to complete chip subsidy deals. Politico finds that Biden’s chips legacy fraying even before Trump’s re-election. Despite this, TSMC’s new fab in Arizona is producing higher yields than Taiwan counterparts, per Bloomberg. 

Mentioned publications 

  1. Who might make up Trump’s Cabinet – Politico, November 6, 2024
    Politico provides a detailed dossier of potential cabinet members for Trump’s second administration. 

  2. The Man Who Would Help Trump Upend the Global Economy – Edward Alden, Foreign Policy, May 18, 2024
    Foreign Policy profiles Robert Lighthizer, the man who was USTR and may be again. 

  3. HF sponsored accessDonald Trump’s trade remedies reflect America’s troubled reality – Robert Lighthizer, Financial Times Op-ed, November 1, 2024
    Lighthizer describes his outlook toward US trade policy in a recent Financial Times Op-Ed. 

  4. HF sponsored accessThe internal rivalries that will determine Trump’s policies on trade – Alan Beattie, Financial Times Op-ed, October 31, 2024
    Beattie refreshes our memories on the jockeying and infighting among Trump Administration officials. 

  5. The return of Trumponomics excites markets but frightens the world – The Economist, November 6, 2024
    The Economist catalogues the ways in which Trump’s policies might impact the US and global economy. 

  6. Tariff Man – Sam Lowe, Most Favoured Nation, November 8, 2024
    Lowe shares his initial thoughts on key Trump Administration trade policies. 

  7. Trump's tariffs would reorder trade flows, raise costs, draw retaliation – Reuters, November 4, 2024
    Reuters focuses on the impact of tariffs, particularly on agriculture exports and trade flows and expected retaliation to any Trump tariffs. 

  8. Fiscal, Macroeconomic, and Price Estimates of Tariffs Under Both Non-Retaliation and Retaliation Scenarios – Budget Lab, Yale University, October 16, 2024
    Yale’s Budget Lab estimates that real US GDP could contract up to 1.4% under Trump’s tariffs proposals. 

  9. Presidential Tariff Powers and the Need for Reform – Clark Packard and Scott Lincicome, Cato Institute, October 9, 2024
    Packard and Lincicome describe how few guardrails exist to curb the US President’s vast authority to impose sweeping trade restrictions. 

  10. Trade Fact of the Week: The U.S. manufacturing trade deficit rose by over 60% from 2016 to 2021 – Ed Gresser, Progressive Policy Institute, June 18, 2024
    Gresser shows that Trump’s first term tariffs resulted in increased deficits. 

  11. Trump’s Immigration Policy Would Make Food Inflation Even Worse – Deena Shanker, Bloomberg, November 1, 2024
    Bloomberg explains how a crackdown on immigration could lead to worsened food price inflation. 

  12. South Korean Economy Would Shrink Under Trump Duties, Study Says – Sam Kim, Bloomberg, October 31, 2024
    Bloomberg reports that under Trump tariffs, South Korea’s GDP could shrink as much as 0.67%.

  13. Ready or not? How China scrambled to counter the second Trump shock –  Antoni Slodkowski, James Pomfret, and Laurie Chen, Reuters, November 8, 2024
    Reuters describes how China is insulating itself from a second Trump shock. 

  14. China’s Playbook for Trump Tariffs Won’t Work This Time – Jacky Wong, The Wall Street Journal, November 7, 2024
    The WSJ asserts that China has less room to maneuver around the impact of Trump tariffs. 

  15. Trump’s Win Sets Off Race to Complete Chip Subsidy Deals – MacKenzie Hawkins, Bloomberg, November 8, 2024
    Bloomberg reports that the Biden Administration is rushing to finish subsidy agreements. 

  16. Biden’s high-tech legacy fraying even before Election Day – Christine Mui and Brendan Bordelon, Politico, November 2, 2024
    Politico reports that agreements negotiated under the CHIPS act are struggling to meet its requirements.  

  17. TSMC’s Arizona Chip Production Yields Surpass Taiwan’s in Win for US Push – Mackenzie Hawkins, Bloomberg, October 25, 2024
    Per Bloomberg, TSMC’s new Arizona fabs have achieved yields greater than similar factories in Taiwan. 

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The rest of the world seeks alternatives

What are the BRICS economies seeking? The Council of Councils assesses the recent BRICS summit and finds that the BRICS grouping is an expanding alternative to a US-dominated order. Nicholas Bequelin in Foreign Policy argues that the BRICS isn’t trying to rival the West. Bloomberg names the "New Neutrals" – economies that are not picking sides between the US and China or Russia. 

Mentioned publications 

  1. The BRICS Summit 2024: An Expanding Alternative – Council of Councils, November 7, 2024
    Thinks tanks from BRICS economies examine the meaning and outcomes of the recent BRICS summit. 

  2. No, BRICS Isn’t Trying to Rival the West – Nicholas Bequelin, Foreign Policy, October 30, 2024
    Bequelin claims that the BRICS is an effort to rebalance power within the existing global order. 

  3. Not Picking Sides Is Paying Off for These Countries – Nicole Gorton-Caratelli, Shawn Donnan, Enda Curran, Dorothy Gambrell, Bloomberg, October 23, 2024
    Bloomberg dubs a group of 101 economies the "New Neutrals": those who avoid choosing between a US-led Western bloc of countries and those led by Russia and China. 

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