Globalization Can Survive the US Trade War
The prosperity gains from interaction are too great for the rest of the world to turn more protectionist.
A Chinese national flag flies atop a China customs building at Yantian International Container Terminals. The nation has responded to US tariff threats by increasing its exports elsewhere.
Photographer: Cheng Xin/Getty Images
As US President Donald Trump’s sweeping trade levies take effect and raise his country’s average duties to the highest since World War II, it’s easy to imagine globalization is in reverse and that a new era of protectionism, fragmentation and reshoring has begun. Some of the gloom may be overdone.
Although the US was the chief architect of the multilateral trading system and has become the world’s most lucrative consumer market, it can’t by itself turn back the clock on global economic interdependence. Prosperity gains from comparative advantage and low-cost container shipping are too great for the rest of the world to ignore. Even as the US embraces self-sufficiency and reveals itself to be an unreliable economic partner, others are keen to keep trading.