Peterson Perspectives: Interviews on Current Issues

Keynes and Bown describe President Trump’s decision to declare an emergency on the US southern border. On May 30, Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA) and stated he would impose new tariffs on all US imports from Mexico starting June 10 unless, in his view, the “illegal migration crisis is alleviated through effective actions taken by Mexico.” They discuss the potential legality of such an action, as well as the likely economic implications for the United States, Mexico, and the trading system.

Keynes and Bown explain Trump’s latest trade actions in his national security cases on steel, aluminum and automobiles. They speak with Kristin Dziczek (Center for Automotive Research) about perceived threats to R&D of “American-owned” carmakers, as well as the political and economic implications of Trump negotiating voluntary export restraints on autos from the EU and Japan. They also describe the managed trade implications of the agreement to remove US tariffs on steel and aluminum from Canada and Mexico, as well as the possible resumption of future conflict.

Lucie Gadenne (University of Warwick, IFS) joins Keynes and Bown to explain when and why some countries use import tariffs as an important source of total tax revenue collections. They discuss her research on the fiscal cost of trade liberalization, what has happened recently when poor countries cut tariffs, and how and why things were different historically when today’s rich countries opened up to trade.

Keynes and Bown update the sudden change in US-China trade negotiations and President Trump’s tariff escalation. They speak with Lingling Wei in Beijing (Wall Street Journal) about misunderstandings and why the two sides remain so far apart. They also discuss the expected economic impact of Trump’s new tariffs, as well as his proposal to buy US farm products and distribute them to poor countries.

Duncan Robinson (The Economist) joins Soumaya Keynes and Chad Bown to provide an update on the Brexit process of the United Kingdom leaving the European Union. They discuss ongoing cleavages in the major British political parties, and implications of the 2019 elections to the European Parliament taking place in the United Kingdom as well as across Europe.

Soumaya Keynes and Chad Bown chat with Gene Grossman (Princeton University) about decades of research on what determines tariffs in the real world. They discuss the role that voters, politicians, lobbyists, and campaign contributions play in setting out the supply of and demand for trade protection. They also describe what political economists may have gotten wrong, as well as the role that identity politics may have played in shaping the recent trade backlash and election of Donald Trump.

Soumaya Keynes of The Economist and Chad P. Bown of PIIE discuss the hotly anticipated US International Trade Commission economic impact assessment of the US-Canada-Mexico Agreement. They explain the ITC use of economic models to show potential effects on the US economy of changing from the North American Free Trade Agreement to the new USMCA. They describe distributional and overall economic impacts arising through the resolution of uncertainty on data and digital information, new rules of origin for the automobile sector, and other policy changes induced by the USMCA.

Mona Pinchis-Paulsen (New York University) joins Soumaya Keynes and Chad Bown to discuss the historical origins and tradeoffs of justifying trade restrictions under the threat to national security. Sparked by an April 2019 WTO ruling involving combat between Russia and Ukraine, they explain the key fight within the original team of American negotiators that arose in the 1940s when setting up the International Trade Organization at the close of World War II. They discuss whether today’s Article XXI is 'self-judging' and 'non-justiciable,' they foreshadow conflicts around President Trump’s national security tariffs on steel and aluminum, and they describe implications for the future of the WTO.

Keynes and Bown replay episode #45 (July 2, 2018), explaining the outsized importance of "zeroing"—a technical, yet politically controversial method the United States uses to calculate antidumping tariffs. They speak to Thomas Prusa (Rutgers University) about zeroing’s contentious negotiating history, how it works in practice, who is in favor of it, and how much trade is affected by it. They also discuss how the dozens of WTO disputes the United States has lost over this issue set up the current showdown facing the WTO Appellate Body and the future of the trading system.

Former Mexican President Ernesto Zedillo (Yale University Center for the Study of Globalization) joins Soumaya Keynes and Chad Bown to chat about Mexico’s history of trade and trade deals. They start in 1980 with Mexico’s closed economy, and then they discuss its entry into the GATT, the NAFTA, Ernesto’s Presidency (1994-2000), Mexico’s negotiations with the European Union, and more. In addition to its contentious relationship with the United States, they also grapple with inequality, investor-state dispute settlement, Mexico’s labor laws, its trade issues with China, and the new United States-Mexico-Canada Agreement.